SBRA

Image source: The Motley Fool. Monday, August 3, 2026 at 10 a.m. ET EVP, Finance - Lukas Hartwich CEO, President and Chair - Rick Matros Chief Financial Officer - Michael Costa Operator: Good day, everyone. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sabra Healthcare REIT Second Quarter 2026 Earnings Call. I would now like to turn the call over to Lukas Hartwich, EVP, Finance. Please go ahead, Mr. Hartwich. Lukas Hartwich: Thank you, and good morning. Before we begin, I want to remind you that we will be making forward-looking statements in our comments and in response to your questions concerning our expectations regarding our future financial position and results of operations, including our earnings guidance for 2026 and our expectations regarding our tenants and operators and our expectations regarding our acquisition, disposition and investment plans. These forward-looking statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ materially, including the risks listed in our Form 10-K for the year ended December 31, 2025, as well as in our earnings press release included as Exhibit 99.1 to the Form 8-K we furnished to the SEC yesterday. We undertake no obligation to update our forward-looking statements to reflect subsequent events or circumstances, and you should not assume later in the quarter that the comments we make today are still valid. In addition, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as well as the explanation and reconciliation of these measures to the comparable GAAP results included on the Financials page of the Investors section of our website at sabrahealth.com. Our Form 10-Q, earnings release and supplement can also be accessed in the Investors section of our website. And with that, let me turn the call over to Rick Matros, CEO, President and Chair of Sabra Health Care REIT. Rick Matros: Thanks, Lukas, and welcome, everybody to our second quarter earnings call. First, on to investment activity. We closed approximately $600 million in investments, including $100 million in skilled nursing, and we're closing on an additional $100 million in SHOP investments. Our pipeline is as active as it has ever been. The deals that we've done have been closed at attractive yields, and we've got an immense amount of deals that we're looking at, and we were able to remain competitive within the range of deals that we currently announced. Going to operations. Our consolidated unconsolidated and same-store SHOP cash NOI margins continue to grow. Our triple-net skilled portfolio again shows increased rent coverage as does our top 10 in total. Our triple-net senior housing did show a drop in occupancy and coverage, but that was specifically due to the transition of a high-performing asset from triple net to SHOP. Without that, the results would be still quite strong, but essentially be flat. We expect Medicaid rates taken together to come in around 2% as rates continue to revert to pre-pandemic levels as we have been articulating. Even at that level, rate growth continues to feed the momentum of improved performance. The final rule for the Medicare market basket came in at 2.4%, the same as the proposed rule, which met expectations. We don't see any regulatory changes that would create any new hurdles, and we're particularly pleased to see leverage drop to 4.61%. And with that, I'll turn the call over to Darrin. Darrin Smith: Thank you, Rick. Sabra's managed senior housing portfolio had another great quarter with continued growth. The total managed senior housing portfolio, including non-stabilized communities and joint venture assets at share had sequential revenue growth of 9.6%, cash NOI growth of 14.4% with margin expansion of 130 basis points. These statistics demonstrate sequential improvement in operating results that reflected continued growth and strong performance in Sabra's senior housing portfolio. During the second quarter, Sabra invested $274.1 million, adding four properties to Sabra's managed senior housing portfolio, three skilled nursing communities, the redevelopment of a senior housing community and acquisition of the operations of one senior housing property converting to managed senior housing. Subsequent to quarter-end, Sabra invested an additional $223 million, adding seven properties to Sabra's managed senior housing portfolio, bringing total year-to-date investments to roughly $599 million with an estimated initial cash yield of 7.5%. Additionally, Sabra has another $100 million of additional awarded managed senior housing and skilled nursing investments, which should close prior to year-end. In addition to the $700 million in closed and award investments, Sabra has an additional $330 million of managed senior housing investments that we are actively pursuing. On a year-over-year basis, Sabra added 21 assets to our managed senior housing portfolio, a nearly 24% increase by number of assets and nearly 76% increase in total managed senior housing NOI. Deal flow continues to be extraordinarily robust and Sabra remains competitive on new investments. Moving on to the same-store portfolio. Sabra's same-store managed senior housing portfolio, including joint venture assets at share, continued its strong performance in the second quarter. The key numbers are: revenue for the quarter grew 8.6% year-over-year with our Canadian communities growing revenue by 7.8% in the same period. Second quarter occupancy in our same-store portfolio was up 170 basis points to 88.2% year-over-year. Notably, our domestic portfolio occupancy increased 170 basis points to 85.7% during that period, while our Canadian portfolio grew 160 basis points to 93.2% in the same period, marking the ninth consecutive quarter where occupancy was over 90%. RevPOR in the second quarter continued to rise with an increase of 6.6% year-over-year with our Canadian portfolio increasing 5.9% in the same period. While RevPOR and occupancy continue to grow, exPOR increased 4.1% for the same period, providing for cash NOI growth of 13.7% on a year-over-year basis. With $700 million in closed and award investments to-date, a very robust pipeline and industry tailwinds at our backs, we should continue to see solid growth in our portfolio. And with that, I will turn the call over to Michael Costa, Sabra's Chief Financial Officer. Michael Costa: Thanks, Darrin. For the second quarter of 2026, we recognized normalized FFO per share of $0.38 and normalized AFFO per share of $0.40 compared to $0.38 and $0.39, respectively, in the first quarter. Year-over-year, our second quarter normalized FFO per share and normalized AFFO per share posted increases of 3% and 5%, respectively. For the quarter, total cash NOI was $144.3 million compared to $138.7 million in the first quarter. This $5.6 million sequential improvement was the primary driver of our sequential normalized AFFO per share growth and reflects continued operational improvement in our managed senior housing portfolio and the benefits to our triple net portfolio from diligent portfolio management. Cash NOI from our managed senior housing portfolio was $44.6 million this quarter compared to $39 million last quarter. This increase reflects both the contribution from recent investment activity and continued occupancy gains, rate growth and margin expansion in the same-store managed senior housing portfolio. Cash rental income from our triple net portfolio was $94.1 million for the quarter compared to $89.8 million in the first quarter. During the quarter, we exercised our option to reset the rent under our lease with Avamere to a fixed amount tied to the portfolio's historical performance. This increased the annualized fixed cash rent to $48 million and was retroactive to February 1, 2026, which compares to $41 million of cash rent paid in 2025. This added $3.2 million of rental revenue during the quarter, which includes $1.6 million of out-of-period revenues that we normalize in our quarterly results. We also recognized a $1.6 million increase in cash rental income from several smaller portfolio initiatives, including rent resets, lease amendments and lease extensions. Our ongoing proactive portfolio management generally flies under the radar, but provides meaningful benefits to our earnings profile and portfolio quality and are a direct product of the incredible work that the Sabra team does day in and day out. In addition, recent triple net acquisitions and investments added $823,000 of cash rental income sequentially. Offsetting these increases was a reduction of $1.3 million as a result of the CommuniCare sale announced last quarter and a $226,000 reduction related to the transition of a triple net senior housing facility to our managed senior housing portfolio. Interest and other income was $5.8 million for the quarter compared to $10 million in the first quarter. The decrease was primarily due to reduced interest income from the discounted payoff of the RCA mortgage loan discussed in our July 21 business update. Cash interest expense was $27.4 million for the quarter compared to $26 million in the first quarter. The increase reflects higher borrowings under our credit facility to fund completed investment activity. Normalized cash G&A was $10.7 million for the quarter compared to $11 million last quarter. This modest decrease is the result of incurred expenses in the first quarter related to hosting our 2026 operator conference, partially offset by an increase in performance-based compensation expense this quarter. This quarter, we recorded a $102.4 million provision for loan losses and other reserves. This is primarily related to the discounted payoff of the RCA mortgage loan discussed in our July 21 business update, and this charge was excluded from our normalized quarterly results. During the quarter, we moved the leases with two tenants from cash basis accounting to accrual basis accounting. Accordingly, we realized a $3.1 million recovery of straight-line rent receivable and lease intangibles, of which $3 million is normalized in our quarterly results. This will have a positive impact on FFO going forward and more importantly, reflects the continued strengthening of these operators' underlying performance and payment history. We also wrote off $1.3 million of straight-line rent receivable from a triple net senior housing facility that was transitioned to our managed senior housing portfolio during the quarter. This amount was also normalized in our quarterly results. As noted in our July 21 business update, we increased our earnings guidance for 2026 and have reaffirmed that earnings guidance. At the midpoint, this represents approximately 7% year-over-year growth in normalized FFO per share and 8% year-over-year growth in normalized AFFO per share. Now briefly turning to the balance sheet. Our net debt to adjusted EBITDA ratio was 4.61x as of June 30, 2026, compared to 5.04x at March 31, 2026. This meaningful improvement reflects the payoff of the RCA mortgage loan and continued earnings growth within our portfolio, positioning us comfortably below our previous target leverage of 5x. We had approximately $1.3 billion of liquidity at quarter end, consisting of $231.6 million of unrestricted cash and cash equivalents, $682.5 million of available borrowings under our credit facility and $411.8 million related to shares outstanding under forward sale agreements under our ATM program. As of June 30, 2026, we are in compliance with all of our debt covenants. We continue to use the forward feature under our ATM program to efficiently fund future investment activity and preserve balance sheet flexibility. During the quarter, we utilized the forward feature of our ATM program to allow for the sale of up to 921,000 shares at an initial weighted average price of $20.72 per share net of commissions. As of June 30, 2026, 21.4 million shares remain outstanding under forward sale agreements at an initial weighted average price of $19.24 per share net of commissions, and we have $334.1 million of availability remaining under the ATM program. Finally, on August 3, 2026, Sabra's Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on August 31, 2026, to common stockholders of record as of the close of business on August 14, 2026. The dividend is well covered and represents a payout of 75% of our second quarter normalized AFFO per share. And with that, we will open up the lines for Q&A. Operator: We will now begin the question-and-answer session. Our first question will come from the line of Farrell Granath with Bank of America. Farrell Granath: My first one is really just diving in a little bit deeper to your same-store SHOP guidance. I know maintaining that low to mid-teens with now the first half of the year averaging about 14.1% same-store NOI growth. And as we're heading now into peak leasing season, I wanted to touch base on really how you're feeling about the current market conditions, especially when we've seen the stabilization in same-store SHOP NOI guidance kind of across the peer set. Rick Matros: Yes, sure, Farrell. So in terms of our SHOP guidance, we've reaffirmed that low to mid-teens growth rate that we put out earlier this year. As you noted, we've been right firmly within that range. And we continue to see opportunities for upside in that portfolio, but also at the same time, want to preserve that flexibility with how the rest of the year pans out. As we get further into the year and we have more visibility on what the second half is going to hold for us, it's something that we'll revisit. Farrell Granath: Okay. And I also just wanted to touch on in the press release, there have been mention about additional or a few value-add opportunities, especially in the SHOP pipeline. And I was curious if you can just dive in a little bit deeper of how you're evaluating those? And kind of what are the hurdles that need to be reached for them to become under LOI or for you to move forward with the transaction of value add? Rick Matros: Sure. We've discussed previously that we are interested in investing in opportunities where there's a bit of a turnaround opportunity, but nothing monumental. These opportunities, the upside opportunities here encompass six properties and about 713 AL memory care units with an average age of five years. Five of the properties are located in desirable Atlanta suburban markets and the six is located in a solid Denver market. Occupancy is roughly 80% and the expected year one yield is, say, roughly 6%. We see a clear path to stabilization in the next year or two with stabilized yields around 9% and teen IRRs. All of these are being purchased well below replacement cost. And both of these opportunities are with existing relationships and the incumbent operator. Darrin Smith: An additional data point I'll give you, Farrell, is a lot of the stuff that we've been buying over the last couple of years has been high 80s or 90-ish occupancy. So the value add for us is maybe closer to 80%. It's not 70% or 65%, right. Operator: Our next question will come from the line of Seth Bergey with Citi. Seth Bergey: I just wanted to kind of talk about the pipeline of future opportunities that you're seeing. I think you mentioned kind of $100 million of SHOP opportunities and maybe $300 million of visibility after that. Just what's the mix between skilled and SHOP in that pipeline? And where are you seeing the most kind of opportunities today? Rick Matros: So the $100 million that we referred to, we're in the process of closing. So that will take our total for the year to $700 million. The other $300 million plus we're working on is all SHOP. And most everything else we see in the pipeline that's under review, which exceeds $1 billion as we sit here today is almost entirely SHOP. Seth Bergey: And I guess just a quick follow-up on that within SHOP, like should we expect to see additional kind of value-add acquisitions? Or where are you seeing the most opportunity with SHOP today? Rick Matros: Yes. I would say the bulk of it will be stabilized, which is really what we've been articulating. But given the volume of investments that we're doing, we will continue to look for value-add as well because as Darrin noted, that takes us from sort of low double-digit IRRs, which is great, but it takes us to mid-teens on the IRR. So we're going to continue to look for those opportunities. Operator: Our next question will come from the line of Austin Wurschmidt with KeyBanc Capital Markets. Austin Wurschmidt: Rick, I guess with the RCA loan now behind you, what are sort of the latest thoughts of exiting the behavioral segment altogether? I know it's something you've talked a little about and kicked around. Just curious what the latest thoughts are there. Rick Matros: Yes. Sure, Austin. So the bulk of our -- the bulk of what we have left is Signature Behavioral of the psych hospitals. Everything else is kind of in the process of going away and following few things. So as it pertains to Signature Behavioral, as I mentioned before, they are interested in taking us out. They've been a very reliable tenant for nine years now. It's a completely different situation than RCA, obviously. So we'll see. We'd be open to it having them take us out. It's going to have to be something that's compelling to us. And assuming that happens, then we're pretty much out. I think our other category, which is mostly a couple of hospitals and a rehab hospital and those coverages are off the charts, so they just kind of knock out of the park, will be down to 4% or 5%. So we'll be 95% senior housing and skilled nursing. Austin Wurschmidt: That's helpful. I mean any sense around what proceeds or pricing could look like on Signature taking you guys out or out of the bulk of that segment altogether? Rick Matros: Not yet, but we do -- we are confident that if there's a deal to be done, we'll have a really nice return on that investment. Austin Wurschmidt: And last one is just on the $1 billion kind of future pipeline, you mentioned entirely within the managed senior housing. Is that mostly one-off type opportunities? Are there any portfolio transactions in there that you're evaluating? Just kind of what comprises that kind of longer-term pipeline? Darrin Smith: Yes, there's a couple of smaller portfolios, I'd say, three to five assets, and most of it though is single asset opportunities. Operator: Our next question will come from the line of Juan Sanabria with BMO Capital Markets. Juan Sanabria: Just on the guidance that was reiterated from [ 7/21 ], could you just talk to what's included in terms of the acquisitions closed subsequent to quarter end? I think you said they were in a 6% cap. And if they're not included, why? Rick Matros: Yes. So everything that was included in our guidance from two weeks ago now, everything that was closed as of that date was included in there and everything that closed in the last two weeks is effectively included in that same guidance. If you think about where we were two weeks ago, and we had a good line of sight into what the rest of the year was going to shape up as, what the second quarter was going to shape up as, so that was all factored into that guidance. And the investments that were made subsequent in that two-week intervening period would have moved the needle for 2026 -- for 2027 and beyond, yes. But given that it's only five months, we're going to move the deal. Juan Sanabria: And how much was closed subsequent to the 7/21 in those last 2 weeks? What's the dollar amount? Rick Matros: I'd have to get that few, Juan. Juan Sanabria: We'll get a few over on the call. Great. And then just as a follow-up, just curious how we should think about exPOR going forward and sort of the operating leverage inherent in the portfolio. Rick Matros: Yes. I mean in terms of exPOR, this quarter, we saw a little bit of spike in that, and it was a mix of things. There's choppiness with things like repairs and maintenance, which is kind of a constant factor in this type of business. We saw some increases in things like incentive management fees. It was actually kind of a good outcome to see an increase there because it just shows that our operating partners are exceeding our expectations and their expectations for those portfolios. So I would say outside of lumpiness when you have things like repairs and maintenance, the exPOR growth should return. Our expectation is that it should return to what we've been seeing in the last couple of quarters, 2%, somewhere in that range. Operator: Our next question will come from the line of Connor Mitchell with UBS. Connor Mitchell: The funding side of the transaction equation that plays into the targeted acquisitions. The stock price reacted positively following the business update in July, but it's come back a little bit since. So when you experience an improved cost of capital, does that change the type of assets that you would buy or add on to the pipeline? Rick Matros: No, it doesn't. We've been able to get things done at attractive yields given where our cost of capital was before the business update. And so no, it doesn't change that at all. We're still in a better place than we were before the update. There has been a pullback sort of across the space. So hopefully, that will pass, and hopefully having a solid quarter like we just announced will help as well. But no, it doesn't change that calculus. It just makes things a little bit more accretive a little bit sooner. That's all. Connor Mitchell: Yes, of course. I appreciate that color. And then maybe just sticking on the funding side. You still have room to run with the forward ATM, the spot ATM and then now your leverage profile is lower, focusing on the equity issuances from the forward ATM and regular ATM? Or do you kind of look at debt as more of an opportunity to bring the leverage profile back up to that 5x target that you were mentioning? Michael Costa: Yes. In terms of the leverage, I mean, we're not looking to jack up our leverage back to 5x with the next deal we do, right? So the beauty of having our leverage where it's at right now is that it gives us plenty of cushion as deals come up and as we finance additional opportunities that if the equity markets aren't cooperating, we could still execute on those transactions without being concerned about where our leverage levels are. So it just gives us a lot of breathing room in that regard. With regards to the forward equity issuances that we have already made and that are currently outstanding, when we look at executing on the forward, it's an internal conversation that we have with regards to what our line of sight is and our visibility is into investment opportunities. And if the stock price and the cost of equity at that point in time makes sense and allows us to transact on these opportunities accretively, that's when we look to lock in that cost of capital. So said differently, what we've already locked in, in terms of forward ATM proceeds would allow us to close on all the things that Darrin was talking about earlier at an accretive price. And that's just going to be our philosophy going forward. If we see the stock market and our equity price cooperating with us vis-a-vis our investment opportunities, we'll continue to proactively take advantage of that. Rick Matros: And going back to awards question, we closed on $223 million in the last two weeks. Operator: Our next question will come from the line of Vikram Malhotra with Mizuho. Vikram Malhotra: I guess just first one, going back to the value-add assets that you bought. I know you flagged this maybe a quarter or two ago of shifting away. But I'm just, I guess, stepping back and wondering like what's compelling you to go down kind of more -- a bit more risk on into this value-add kind of segment where there's a lot of competition, cap rates are compressing. You've already sort of grown your -- correct me if I'm wrong, I think your SHOP revenue is now 30-plus percent. So it seems like you're in a good spot. So I'm almost wondering like does it make sense to actually pause and just now see the benefits of the hard work you've done in the last, call it, two years? Rick Matros: Well, a couple of things, Vikram, I appreciate the question. So one, we're not doing very much of it. Two, there's not really risk attached to it because the value add that we're doing is already at 80% occupancy. So you're already at your leverage inflection point in terms of the revenue pull-through that you get as you get additional residents into the facilities. And we're only doing these with some operators that we currently have relationships with and have already proven to us what they can do with other assets that were in the exact same place. So there's a clear path to going from 80% to 90%, say, on these assets. So if we were doing stuff that was at 65%, then I would really take your point and say, okay, we're not going to do that. And we're not going to do that. So again, it's a small number relative to the amount of volume that we're doing, and it's relatively stabilized with a clear path to an improved stability. Does that answer your question? Vikram Malhotra: Yes. No, that's helpful. I mean I guess I was just saying you kind of had 1.5 years ago stated you'd like to be close to 35%, 40% drop. I think you're there now. So I'm sort of wondering, you have a lot of embedded growth in the next two years through the SHOP pool. So is it actually almost more accretive to just pause here and just see the benefit of the organic growth that everyone is going to see in the next two years? That's kind of the point I was trying to get at. Rick Matros: No, I get it. And again, if we were doing, I guess, true value add with much lower occupancy, I would agree with you, but we're not doing that. And then the other point I would make is we said that we wanted to be at a 40% SHOP NOI run rate by the end of this year, but that's not where we want to end. We want to continue to grow that exposure. So we're not content to be where we are now, even though the 450 basis point improvement in SHOP NOI exposure from last quarter was significant. So again, we're not taking real risk here. And again, we're doing this with operators that are currently -- that we're currently partnered with that have taken assets that are very much like these and taking them to the next level. Vikram Malhotra: That's fair. Just maybe one more, I guess, maybe, Michael, I guess, on this year, I mean, in terms of the benefits that flow through, obviously, next year, you'd have the bumps, you'd have, I guess, half a year, correct me if I'm wrong, but the annualized the step-up from the transition assets and then all the acquisitions you do and the benefit of the organic growth there. So I'm just wondering like are there any big pieces we're missing like the Street is kind of at 6% growth from what I can see on Bloomberg for next year. Given all the acquisitions, like is there something we're all missing? Is there -- I mean you don't have a lot of debt coming due. It doesn't seem to be like any other -- you've got a lot of sources for funding. So I'm just wondering, as we look at any big picture building blocks given all the acquisitions you've done we should think about next year? Michael Costa: Yes. I think you named off all the major building blocks. Look, we have an increasing -- a SHOP portfolio that's increasing by size by every quarter that passes, right? That's going to continue in our expectation, I think the market's expectation as well, continue to drive outsized earnings growth compared to triple net. We have an extremely healthy triple net portfolio that's going to increase by those contractual rates. We've been making these acquisitions that have solid embedded growth in them. And I think all those building blocks set us up to be able to deliver not just for 2027, but into 2028 and beyond with solid earnings growth on a year-over-year basis, and that's our overall objective. Vikram Malhotra: Yes. I guess maybe just to clarify, so like your peers who've also been kind of maybe -- I don't want to say taking on risk, but like trying to accelerate the growth through other strategies have all sort of saying we're trying to create a growth profile, which used to be 4% on AFFO to more like 6% plus. And it seems like you're getting there. I'm just trying to figure out like how sustainable is this 5%, 6% growth as we look forward into next year and beyond? Rick Matros: So I think it's quite sustainable. We're actually at 7% and 8% on our upgraded guidance at the midpoint because in 2027, we're really going to start to see much more of the benefit of the acquisitions that we've been doing, and that will flow into 2028 as well. Operator: Our next question will come from the line of Rich Anderson with Cantor Fitzgerald. Richard Anderson: So on the RCA payoff, the $100 million of, I guess, call it, discount that you offered, the $200 million is essentially a capital raise at over 11% cap rate. And if you apply that to a 7.5% return on redeployment, then that's about $0.05 of annualized dilution. First of all, do I have that right? And second of all, is that baked into this new guidance? Would your guidance been $0.025 greater had it not been for that transaction? Michael Costa: Yes. I mean, look, if we hadn't -- if -- well, let me answer your second question first. Yes, it is factored into our guidance. And those proceeds because we don't assume any investments over and above what has been completed in our guidance, effectively, we're assuming we're just paying down debt with those proceeds. There's better use of our capital in the form of investments that, that capital is going to be used for. But that's what's assumed in our guidance. So I think it is reasonable to assume that our guidance would have been higher absent that, right? Richard Anderson: Yes. Understood. I hate seeing $100 million go proof like that. I understand why you do it, but it comes through in the numbers one way or another. So I just wanted to sort of get the numbers right in my model. Second, more SNF transactions are popping up into the system. I understand a lot of your future is SHOP, but you did say $100 million of SNF transactions. What do you think is causing that, Rich? I mean what's changing in the environment that has caused more in the way of SNF opportunities passing the smelt test for you guys? Darrin Smith: So I don't think anything has changed. Those opportunities were off market brought to us by existing operators. And I think that's where it's going to come from going forward. We're just not seeing the kind of SNF volume that we saw pre-pandemic where guys that didn't have to sell wanting to monetize and would sell. I think that operators got beaten up pretty badly during the pandemic, and they've been recouping their losses and now they're doing well, and they're just not willing to put their assets on the market unless they have to for some other reason. And so there's such a small amount, and I'm talking about sort of the straight down the fairway, triple net skilled nursing, not loan investments and things like that. There just isn't enough available for it to go around for all of us. And so the private guys that are buying opcos and propcos can always outbid us because we're just bidding on the real estate. So I think going forward, at least in the immediate -- in the foreseeable future, it will be more off-market opportunities that will come our way, hopefully. Maybe in 2027, we'll see behaviors that revert back to sort of the norm, the pre-pandemic norm where folks finally were doing well enough for a long enough period of time that it's time for them to start monetizing their assets and moving on. Richard Anderson: Okay. And last question for me, SHOP and specifically Canadian opportunities. There's a little bit more of a ceiling in terms of your ability to grow rents in Canada, whether it's real regulatory stuff or social issues around rent growth for seniors. Does that make it a little bit more difficult to be active in that market? Or can you still find the requisite return even going forward relative to your U.S. pipeline? Rick Matros: Sure, sure. So the Canadian market certainly still continues to be very active, and we're still bullish on the Canadian market. I think the biggest issue with investing in the Canadian market, at least for us, is that cap rates still are 100, 150 basis points or so inside of what they are in the U.S. So we see better opportunity in investing in U.S. senior housing today. Richard Anderson: But do you agree with that about just sort of the -- whether it's real regulatory issues in Quebec or something or social issues elsewhere? Do you feel that? Or am I maybe misstating that observation? Rick Matros: Well, we're still seeing very positive RevPAR growth on a year-over-year basis despite the fact that our Canadian same-store portfolio has been over 90% occupied for the ninth quarter, I think, in a row. And there's definitely some more regulations in Canada certainly than there are in the U.S. But I don't think it's had a significant impact on rate growth to date. To say it in the future is a guess. Operator: Our next question will come from the line of Rich Hightower with Barclays. Richard Hightower: So a couple from me. One on Avamere and the transition there. And just give us a sense of maybe any sort of risk factor embedded in, I guess, '26 guidance and even beyond as we think about timing for all the approvals required, if there's any potential delay transition expenses? Anything related to that, that we should be aware of? Rick Matros: No, we don't see anything going forward that's going to impact guidance or performance. There's a big difference when you do a transition that isn't friendly, which was the case with the Holiday transition and a transition like this, which has been sort of planned for quite a long time, is completely cooperative between the two parties. And also in this case, with Cascadia, they have already acquired other Avamere properties, non-Sabra properties and turned them around. And those other properties had the same exact characteristics from an upside perspective that these have. So it's really a great transition, and we really don't have any concerns. Richard Hightower: Okay. That's great. And then I guess maybe more broadly, just on private market competition for SHOP assets specifically. What's your sense of what whether it's private or public or anybody else you're sort of competing against, what are other buyers underwriting in your sense of things in terms of going in yields, unlevered IRRs, cash flow growth in the interim? Just give us a sense of kind of how -- what does it take to sort of win a deal that might be a marketed deal rather than something that comes off market? Darrin Smith: Yes, sure. I think it's really deal specific. Oftentimes, I think if you have a strong relationship with the owner and/or the operator, even if it's a marketed deal, that provides a little bit of an edge and some insight. It's hard to say what others are doing. We've certainly lost deals to competitors in the past, but we've been scratching our head after you hear the announcement on what that yield was, didn't make sense to us as far as how they were getting there. We've also elected not to bid on transactions that some of our competitors have purchased as well at high 6, low 7 cap rates where we just saw too much risk for the risk-adjusted return associated with that. But it's really hard to guess at what's -- what our competitors are assuming as far as a stable occupancy or rate growth. I think it's really transaction specific. Rick Matros: Yes. The other thing I would say is kind of like SNFs. When it comes to our peer REIT, we don't pretty much value assets similarly. So there is a huge discrepancy there. The private guys are a little bit different, obviously. Operator: Our next question will come from the line of Alec Feygin with Baird. Alec Feygin: The first one, on the G&A front, which functions is Sabra hiring for today? Rick Matros: I mean we're looking across the organization. Obviously, our investments team has been extremely busy for the last several quarters, and we continue to add resources there when necessary. We're looking across the company to things like asset management, accounting, finance, other areas where we're experiencing growth, particularly areas that are more impacted by our growth on the SHOP side. On the other side of that, and we talked about it a little bit on the last call, there are several initiatives we're undertaking as we speak and have been for the last several quarters on the technology and AI side that are going to help us be more efficient and be able to perform those same duties at a larger scale without the -- what would have previously been the requisite number of additional heads. Darrin Smith: Another way maybe to think about it is we're not looking at reductions, but particularly with the AI initiatives, we're going to be a lot more scalable, so we won't need to add as many positions as we might otherwise need to add in the absence of those initiatives. Alec Feygin: Got it. That makes sense. And then switching gears a bit. I think, Michael, you said that you moved two tenants from cash basis to accrual accounting. Can you tell us what is the percentage of [ ABR ] that is now on cash basis? Michael Costa: I mean it's going to be the vast majority of our tenant base. I don't have the number in front of me. I can get that to you after the call, but we have a very small amount of tenants that are on a cash basis. And ever since this concept of cash basis accounting came into play, I don't know when it was, 2018, 2019. One thing I was always made a point to clarify is there's tenants that are on a cash basis because of the accounting rules, but they're paying their rent. They're paying their full rent and there's not any variability in the revenues that we're recognizing period-to-period. But there were some that were paying varied amounts and that created some level of variability. The tenants we put on accrual basis have been paying their contractual rent for quite some time. So there's not -- they weren't in the latter category, right? And that's really the area we focus on, the people that weren't paying us their full rent, where is our real risk there? And what can we do about those? And that number is such a small amount today, even more so after some of the initiatives I referenced in my prepared remarks of transitioning tenants, resetting rents or amending leases, that's even further reduced because of those actions. So it's a very small amount, which is obviously a good place to be. Rick Matros: We were in the high 90s on accrual. Operator: Our next question will come from the line of Michael Stroyeck with Green Street. Michael Stroyeck: Can you maybe provide a bit of color on what drove the acceleration in RevPOR growth during the quarter? Is that greater than 6% growth rate sustainable in the near term? And has there been any broad-based change in pricing strategy among your operators given sequential RevPOR growth was also quite a bit stronger versus historical seasonal levels? Michael Costa: No, I think it's nothing new. I think we should continue to see as far as RevPAR is concerned, mid- upper mid-digit increases. Rick Matros: It's just the natural growth of occupancy and efficiency and a little bit of pricing power. So there's nothing strategically different that's happened. Michael Stroyeck: Yes. Makes sense. Then maybe one on the transaction market, can you just talk about replacement costs? Where are you acquiring at? And how does that compare to, call it, 6 to 12 months ago or so? Michael Costa: Sure. So we're acquiring at -- it depends. It depends where the asset is. It depends on a lot of factors. But I think I'd say we're acquiring at somewhere between the mid-$200 per unit up to $500 per unit. And I think from a replacement cost perspective, that would compare to, say, $400 to $600 plus. It's really dependent upon where in the country those assets are. Rick Matros: In the aggregate, it's probably somewhere around $300 plus a unit. Operator: Our next question will come from the line of Dave Rodgers with Raymond James. David Rodgers: Rick, I wanted to talk about the transition. Obviously, a very successful quarter between Avamere and the other transitions that you were able to announce. Can you maybe talk about that other $9 million? I think you've discussed Avamere quite a bit, but that other $9 million of annualized NOI that you picked up, how much of that is recurring in nature? How much of that can you do going forward? How many opportunities do you have? It all hit this quarter because it was a good time to offset RCA. Like I guess, how did you think about kind of delivering so much in one quarter? And what are the opportunities going forward to kind of do even more of that? Rick Matros: Yes. So the whole thing has been a little strange in terms of how quickly it's happened. There are a couple of other opportunities that we are pursuing. And my guess is that there will be similar transactions, transitions there. It's really a group of individuals. I don't know that it's a trend or anything, but the pandemic really burned out a lot of people. Like we had operators during the pandemic that said, take us out, we're done, we want to retire, we've been doing this for decades. Now that things have been going well for a number of years on the skills front, that same thing has happened. In every single case that we're looking at, it's basically a CEO, Founder and perhaps other executive members that are ready to retire. And so that's why these things also go so smoothly is it's all very productive. They want to get taken out. They want it to work for them. They wanted to work for us. They want it to be somebody that can take over and have a smooth transition and there aren't any sort of cultural ruptures and things like that. But it's interesting that the pandemic just took a lot out of particularly operators that have been around for 30, 40 years. Darrin Smith: Yes. And Dave, the other thing I'll highlight too, we announced it this quarter with our business update. We called it out in our prepared remarks. This all didn't come together in the second quarter. Some of it did, no doubt. Some of it came in the first quarter. but they're all so individually small, we wouldn't have spent any time talking about in the first quarter and stuff happened in prior quarters before that, right? These are like kind of the things we're doing day in and day out that don't grab headlines. But when we're putting together that business update, we're putting the pieces together and like there's a big piece missing from it. What is it? Well, it's this stuff that we've never really talked about publicly, but it is extremely beneficial and extremely meaningful. So to Rick's point, there's going to be some of this stuff on a go-forward basis. And we just are going to do the right thing in terms of improving our earnings profile and our portfolio, and we'll all be benefiting from that. David Rodgers: Maybe just a follow-up on both of those, Rick, your comment in particular that there's people that want to get out. I mean, from a sizing perspective, are we thinking more like a couple of transitions that add up to the $9 million? Or are there a couple of Avamere-sized transitions out there that you could envision whether they happen or not? Rick Matros: These would be smaller transitions than that. And it's a couple that we're currently having conversations with, but they'll be much smaller than that. There will be some incremental benefit to us in all likelihood, but it won't be material. David Rodgers: That's helpful. I appreciate the added color there. And I wanted to follow up on the G&A increase. Obviously, this year, a little larger than the past couple of years. It sounds like a lot of that's related to SHOP. I guess as we think about going forward without talking about '27-'28 kind of guidance, but the increase we see this year, is that something we would expect to see continue as you -- if you were to buy $700 million, $800 million of SHOP a year? Or are there some of these onetime tech AI investments? Is it SHOP management fees that kind of bleed through? Maybe just a little more color on what that run rate looks like given what we've seen this year versus what we've seen in years past. Michael Costa: So I mean one of the biggest drivers in the G&A increase, both primarily in our full year guidance numbers is performance-based compensation. And our Board sets our performance targets at the beginning of the year. And as the year progresses, we evaluate whether or not we think we're going to meet or exceed those targets. And as we put out guidance that was higher this quarter, which implies that we expect that performance to come in higher than what we had initially estimated at the beginning of the year, which drove that increase. In terms of a run rate, what we gave in terms of G&A at the beginning of the year for our guidance, that's effectively assuming no performance-based compensation or basically at our target performance-based compensation expense. So when we go into 2027 and future years, we sit down and we make an estimate, we sit down with our Board, we come up with a performance target and where we land relative to that, we will determine whether we have an increase over that number. So I think probably the run rate we gave for our initial guidance is probably a decent starting point adjusted upwards a little bit for inflation and the like. Now to your point on additional AI initiatives and stuff like that, that is going to add some G&A cost to us, especially upfront. What that is, is to be determined. It has been very incremental to this point. But that will add a little bit to it, but we expect to be saving on the efficiency gains at the same time. Rick Matros: The only other point I'd make, Dave, is even in the absence of AI initiatives, which will make us more scalable, any adds with the growth of SHOP would be incremental because we built our platform almost 10 years ago. So everything that we've done over the last 10 years to add to that platform, both on the human resource side and on the systems side has been incremental. So the AI piece will just make that a little bit better. Operator: And our next question will come from the line of John Kilichovich with Wells Fargo. William John Kilichowski: Rick, back on some of your comments on the value-add stuff, you talked about the 80% occupied versus maybe something 70%, 65% and noted that it's far less risky. However, there still is some risk. It's not tracking with the rest of the SHOP universe that's kind of mid- to high 80%s at this point. So I guess what explains that occupancy delta? Is it just in that part of its lease-up process and you're seeing occupancy momentum gains in maybe year-over-year? Or are these assets stuck at 80%, there's something operationally that you and your operators can do that the previous owner isn't capable of? Rick Matros: It could be a number of factors. It could be a relatively new facility that's still in lease-up, and everything is going fine. They're just not all the way there yet. It could be a facility that has an operator that just wasn't very good. And so we're bringing in an operating partner that has a track record with us and understands that market, which is an important consideration. So it's usually one of those two factors. Darrin Smith: Yes. And the only thing I'd add to that is sometimes you'll see ownership who's hired an operator, but the ownership wants to metal in operations where they should be kind of staying a little bit more hands off. Oftentimes, they'll be limiting marketing funds, other different things instead of just letting the operator do their thing and focus on leasing up and getting it stabilized. William John Kilichowski: Okay. And then my second one, Mike, you gave some helpful color in the opening remarks, but plenty of moving parts in the quarter between the Avamere Cascadia step-ups that are to come. You've got the re-tenanting. We also have some straight-line adjustments. Could you walk through -- and the transition assets, could you just walk through what's a fair run rate number for your revenue items and your straight-line number given what's happened in the quarter versus what's due to happen post quarter end? Michael Costa: Are you referring specifically to Avamere? William John Kilichowski: All the above, if you could touch on what's included in the quarter number as far as Avamere is concerned, but also if any of that $9 million was already included, I think most of it after. And then also at the same time, the earnings impact from the transition, is there anything due to come after? Or is that all captured within 2Q and the accrual numbers as well, the cash basis of tenants flipping to accrual? Michael Costa: Yes. So I could give you a couple of those items and have to get back to you on probably the straight-line number. But in terms of the $9 million, about $1.6 million we saw a hit in the second quarter. And that's due to a variety of things, namely timing of some of these things being completed. Some of that $9 million effect got effectuated post quarter end. So that's probably the best way to think about it. I would say going into 2027, you should assume that full $9 million, right? And like I said, about $1.6 million was recognized in this quarter. For Avamere, I think the best way to think about it, think about it like a two-step reset, right? So we triggered the rent reset effective February 1 or retroactive to February 1 that took the rent from $41 million to $48 million. And then we expect the transition to close sometime later on this year, at which point that $48 million goes to $53 million, right? And you can make your own assumptions on the timing of that, whether it's sometime late third quarter, early fourth quarter, what have you, going into 2027, however, that number would be $53 million. William John Kilichowski: Okay. And is the $1.6 million a quarterly number or an annualized number? Michael Costa: That's a quarterly number. That's just -- we recognize an additional $1.6 million in this quarter related to those initiatives. Operator: And this concludes the question-and-answer session. I'll hand the call back over to Rick Matros for closing comments. Rick Matros: Thanks, everybody, for joining us. We look forward to follow-up with you, and I hope the remainder of your summer is great. And we'll see a bunch of you at the BAML Conference in September. Thanks again. Operator: This concludes today's call. Thank you all for joining. You may now disconnect. Before you buy stock in Sabra Health Care REIT, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sabra Health Care REIT wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Sabra Health Care REIT (SBRA) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Normalized FFO per Share: $0.38 for Q2 2026, flat sequentially and up 3% year-over-year. Normalized AFFO per Share: $0.40 for Q2 2026, up from $0.39 in Q1 and up 5% year-over-year. Total Cash NOI: $144.3 million, up from $138.7 million in Q1. Managed Senior Housing Cash NOI: $44.6 million, up from $39 million in Q1. Triple-Net Cash Rental Income: $94.1 million, up from $89.8 million in Q1. Same-Store Managed Senior Housing Revenue Growth: Up 8.6% year-over-year. Same-Store Managed Senior Housing Cash NOI Growth: Up 13.7% year-over-year. Same-Store Occupancy: Up 170 basis points year-over-year to 88.2%. RevPAR Growth: Up 6.6% year-over-year. ExpPAR Growth: Up 4.1% year-over-year. Net Debt to Adjusted EBITDA: 4.61 times as of June 30, 2026, down from 5.04 times at March 31, 2026. Cash Interest Expense: $27.4 million, up from $26 million in Q1. Normalized Cash G&A: $10.7 million, down from $11 million in Q1. Dividend: Declared quarterly cash dividend of $0.30 per share, representing a 75% payout of normalized AFFO per share. Warning! GuruFocus has detected 11 Warning Signs with SBRA. Is SBRA fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Closed approximately $600 million in investments year-to-date, including $100 million in skilled nursing, with an additional $100 million in SHOP investments expected to close before year-end. Same-store Managed Senior Housing portfolio delivered strong performance with revenue growth of 8.6% year-over-year, cash NOI growth of 13.7%, and occupancy up 170 basis points to 88.2%. Net debt to adjusted EBITDA leverage improved significantly to 4.61 times from 5.04 times at the end of the first quarter, positioning the company comfortably below its previous target of 5 times. Increased 2026 earnings guidance, with normalized FFO per share growth of approximately 7% and normalized AFFO per share growth of approximately 8% at the midpoint. Proactive portfolio management yielded meaningful benefits, including a rent reset with Avamere that increased annualized fixed cash rent to $48 million and moving two tenants from cash basis to accrual basis accounting, reflecting their strengthened performance. Investment pipeline remains robust, with over $1 billion in deals under review, almost entirely in the managed senior housing (SHOP) segment, and the company remains competitive on new investments. Dividend is well covered, with a payout ratio of 75% of second quarter normalized AFFO per share. Recorded a $102.4 million provision for loan losses and other reserves, primarily related to the discounted payoff of the RCA mortgage loan, which was excluded from normalized results but represents a significant capital loss. Triple-net senior housing portfolio experienced a drop in occupancy and coverage due to the transition of a high-performing asset to the SHOP portfolio, which negatively impacted that segment's results. Interest and other income decreased to $5.8 million from $10 million in the first quarter, primarily due to reduced interest income from the discounted payoff of the RCA mortgage loan. Cash interest expense increased to $27.4 million from $26 million in the first quarter due to higher borrowings under the credit facility to fund completed investment activity. The company wrote off $1.3 million of straight-line rent receivable from a triple-net senior housing facility that was transitioned to the managed senior housing portfolio. Medicaid rate growth is expected to come in around 2%, reverting to pre-pandemic levels, which could moderate the pace of revenue growth for skilled nursing operators. The company is pursuing value-add SHOP investments with occupancy around 80%, which carry more risk than stabilized assets, though management notes these are with existing operators and have a clear path to stabilization. Q: Can you provide more color on the value-add SHOP opportunities in the pipeline, including how you're evaluating them and the hurdles to move forward?A: Michael Costa (CFO) explained that the value-add opportunities encompass six properties with about 713 AL/memory care units, averaging five years old, with five in desirable Atlanta suburbs and one in Denver. Occupancy is roughly 80%, with an expected year-one yield of about 6%, a clear path to stabilization in one to two years at around 9% stabilized yields, and teen IRRs. Rick Matros (CEO) added that these are being purchased well below replacement cost with existing operator relationships, and unlike true value-add deals at 65-70% occupancy, these are closer to 80%, which is already at the leverage inflection point, reducing risk. Q: What is the mix between skilled nursing and SHOP in the future pipeline, and where are you seeing the most opportunity today?A: Rick Matros (CEO) stated that the $100 million in awarded investments will bring the year's total to $700 million, and the additional $330 million being pursued is all SHOP. The broader pipeline under review, exceeding $1 billion, is almost entirely SHOP. Darrin Smith (CIO) noted that the bulk of SHOP investments will be stabilized assets, though they will continue to look for value-add opportunities that can push IRRs from low double digits to mid-teens. Q: With the RCA loan now behind you, what are your latest thoughts on exiting the behavioral segment altogether?A: Rick Matros (CEO) said the bulk of what remains is Signature Behavioral's psych hospitals, and everything else is in the process of going away. Signature has expressed interest in taking Sabra out, and they've been a reliable tenant for nine years. Sabra would be open to that if the deal is compelling. If that happens, the "other" category would drop to 4-5% of the portfolio, making Sabra 95% senior housing and skilled nursing. While no pricing details are available yet, Matros is confident any deal would deliver a nice return on investment. Q: Can you discuss the funding side of the transaction equation, particularly whether the improved cost of capital changes the type of assets you would buy?A: Rick Matros (CEO) said the improved cost of capital doesn't change the calculus on asset typesthey've been able to get deals done at attractive yields even before the business update. Michael Costa (CFO) added that with leverage now at 4.61x, they're not looking to lever back up to 5x; instead, the lower leverage provides breathing room to execute transactions even if equity markets aren't cooperating. They'll continue to use forward ATM proceeds to fund investments accretively when the cost of equity makes sense. Q: What's compelling you to go into value-add assets given the competition and cap rate compression, and would it make more sense to pause and just benefit from organic growth?A: Rick Matros (CEO) clarified they're not doing much value-add, and there's not really risk attached because these assets are already at 80% occupancyat the leverage inflection point. They're only doing these with existing operator relationships that have proven they can take similar assets to the next level. While they've reached their 40% SHOP NOI target, they want to continue growing SHOP exposure and aren't content to stop. Vikram Malhotra's point about embedded growth was acknowledged, but Matros emphasized the value-add deals are relatively stabilized with a clear path to improved stability. Q: On the RCA payoff, is the $100 million discount essentially a capital raise at over 11% cap rate, and is that dilution baked into the new guidance?A: Michael Costa (CFO) confirmed the RCA payoff is factored into guidance, with proceeds assumed to pay down debt rather than fund new investments. He acknowledged guidance would have been higher absent that transaction. Rick Matros (CEO) added that the $223 million in investments closed in the last two weeks won't move the needle for 2026 given only five months remain, but will benefit 2027 and beyond. Q: What's driving the increase in skilled nursing transactions, and what's causing more SNF opportunities to pass the smell test?A: Rick Matros (CEO) said nothing has fundamentally changedthese were off-market opportunities brought by existing operators. The SNF market hasn't returned to pre-pandemic volume because operators were beaten up during COVID and are now recouping losses, making them reluctant to sell unless necessary. Private buyers of OpCos and PropCos can outbid REITs on real estate alone. Matros expects off-market opportunities to continue, with a potential return to pre-pandemic behaviors in 2027 as operators finally feel secure enough to monetize. Q: How should we think about ExpPAR going forward and the operating leverage inherent in the portfolio?A: Michael Costa (CFO) explained that the second quarter saw a spike in ExpPAR due to choppiness in repairs and maintenance and an increase in incentive management feesthe latter being a positive sign that operating partners are exceeding expectations. Outside of that lumpiness, ExpPAR growth should return to the 2% range seen in recent quarters. Rick Matros (CEO) added that RevPAR growth in the upper mid-single digits should continue, driven by natural occupancy growth, efficiency gains, and some pricing power. Q: Can you provide color on the Avamere transition and any risk factors embedded in 2026 guidance or beyond?A: Rick Matros (CEO) said there are no concerns about the transition impacting guidance or performance. Unlike the unfriendly Holiday transition, this one has been planned for a long time and is completely cooperative between parties. Cascadia has already acquired other Avamere properties with the same upside characteristics and successfully turned them around. Michael Costa (CFO) detailed the two-step rent reset: from $41 million to $48 million retroactive to February 1, then to $53 million when the transition closes later this year, with the full $53 million annualized in 2027. Q: What's driving the acceleration in RevPAR growth, and is the greater than 6% growth rate sustainable?A: Michael Costa (CFO) said there's nothing new driving the accelerationit's just natural growth from occupancy, efficiency, and pricing power. Rick Matros (CEO) added there's no strategic change, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed strong performance to continued growth in the managed senior housing (SHOP) portfolio, which saw sequential cash NOI growth of 14.4% and margin expansion of 130 basis points. The triple-net skilled nursing portfolio demonstrated increased rent coverage, while a slight drop in senior housing coverage was explained as a temporary result of transitioning a high-performing asset to the SHOP portfolio. Strategic portfolio management, including rent resets and lease amendments, added $1.6 million in sequential cash rental income, reflecting proactive efforts to improve earnings quality. The transition of two tenants from cash to accrual basis accounting was highlighted as evidence of strengthening operator performance and payment history. Management emphasized that the current investment pipeline is 'as active as it has ever been,' with a strategic focus on acquiring assets well below replacement cost. Leverage was successfully reduced to 4.61x, providing significant balance sheet flexibility and a cushion for future investment activity without immediate pressure to issue equity. Reaffirmed 2026 earnings guidance assumes low to mid-teens growth in same-store SHOP NOI, with potential for upside as visibility into the second half of the year improves. The company expects to close an additional $100 million in awarded investments by year-end, bringing the total year-to-date investment volume to approximately $700 million. Strategic exit from the behavioral segment is being considered, with management open to a tenant buyout of Signature Behavioral assets if the return profile is compelling. Future SHOP growth is expected to be driven by a mix of stabilized assets and selective 'value-add' opportunities with occupancy around 80% and clear paths to 90% stabilization. Management is implementing AI and technology initiatives to enhance organizational scalability, allowing for portfolio growth without a proportional increase in G&A headcount. Recorded a $102.4 million provision for loan losses primarily related to the discounted payoff of the RCA mortgage loan, which was excluded from normalized results. The RCA loan payoff resulted in approximately $200 million in proceeds, which management is currently assuming the proceeds will be used to pay down debt in their guidance, though they acknowledge that redeploying the capital into investments would be a better use of funds. A $3.1 million recovery of straight-line rent receivable was realized due to moving tenants to accrual accounting, which is expected to have a positive impact on future FFO. Management noted that Medicaid rates are expected to revert toward pre-pandemic levels, settling around 2%, though this growth still supports improved operator performance. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that 'value-add' refers to assets at 80% occupancy rather than distressed levels, minimizing risk while targeting mid-teens IRRs. These acquisitions are typically made with existing operating partners who have proven track records in those specific markets. The 6.6% year-over-year RevPOR growth was attributed to natural occupancy gains and pricing power rather than a fundamental shift in strategy. Management expects mid-to-upper single-digit RevPOR increases to remain sustainable in the near term. The $100 million discount offered for the RCA payoff is fully factored into the updated guidance. Proceeds are currently assumed to pay down debt, though redeployment into the $1 billion SHOP pipeline would provide further accretion. Management noted a trend of long-term operators seeking to retire post-pandemic, creating opportunities for friendly, productive transitions to new partners. These transitions, such as the Avamere reset, are expected to provide incremental earnings benefits through 2027.

Interested in Sabra Healthcare REIT, Inc.? Here are five stocks we like better. Sabra reaffirmed its improved 2026 outlook after reporting second-quarter normalized FFO of $0.38 per share and normalized AFFO of $0.40 per share. AFFO rose 5% year over year, while management expects approximately 7% FFO and 8% AFFO per-share growth for the full year. The company expanded its managed senior housing portfolio with roughly $599 million of year-to-date investments and a pipeline exceeding $1 billion. SHOP same-store cash NOI grew 13.7% year over year as occupancy increased to 88.2% and RevPAR rose 6.6%. Leverage improved significantly, with net debt to adjusted EBITDA falling to 4.61 times from 5.04 times after the RCA loan payoff. Sabra also declared a quarterly dividend of $0.30 per share, representing a 75% payout ratio based on second-quarter normalized AFFO. 6 largest healthcare REITs to buy and how to invest Sabra Healthcare REIT (NASDAQ:SBRA) reported second-quarter 2026 normalized funds from operations of $0.38 per share and normalized adjusted funds from operations of $0.40 per share, with management reaffirming the higher full-year earnings outlook it issued in a July business update. Normalized FFO per share was unchanged from the first quarter and up 3% from a year earlier, while normalized AFFO per share increased from $0.39 in the first quarter and rose 5% year over year. Chief Financial Officer Michael Lourenco Costa said the midpoint of Sabra’s 2026 guidance implies approximately 7% year-over-year growth in normalized FFO per share and 8% growth in normalized AFFO per share. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Nursing Home REITs: The Surprise Heroes of High Yield Investing Chief Executive Officer Rick Matros said Sabra closed approximately $600 million of investments, including $100 million in skilled nursing investments, and was in the process of closing another $100 million in senior housing operating portfolio, or SHOP, investments. Chief Investment Officer Darrin Smith said Sabra invested $274.1 million during the second quarter, adding four managed senior housing properties, three skilled nursing communities, a senior housing redevelopment and the operations of one senior housing property converted from a triple-net lease to managed senior housing. Subsequent to quarter-end, the company invested another $223 million in seven managed senior housing properties. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Year-to-date investments totaled roughly $599 million at an estimated initial cash yield of 7.5%, Smith said. Sabra also had approximately $100 million of awarded managed senior housing and skilled nursing investments expected to close before year-end, bringing closed and awarded investments to about $700 million. The company was pursuing an additional $330 million of managed senior housing investments. Management described the broader pipeline as exceeding $1 billion and said it was almost entirely SHOP-focused. Matros said most opportunities were single-asset transactions, though the pipeline includes several smaller portfolios of three to five assets. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Sabra added 21 managed senior housing assets over the past year, representing a nearly 24% increase in asset count and a nearly 76% increase in total managed senior housing net operating income, according to Smith. Sabra’s total managed senior housing portfolio, including non-stabilized communities and joint-venture assets at its share, posted 9.6% sequential revenue growth and 14.4% cash NOI growth during the quarter. Cash NOI margin expanded 130 basis points sequentially. In the same-store managed senior housing portfolio, revenue increased 8.6% from a year earlier, occupancy rose 170 basis points to 88.2%, and revenue per available room, or RevPAR, increased 6.6%. Expense per available room increased 4.1%, resulting in 13.7% year-over-year cash NOI growth. Domestic same-store occupancy increased 170 basis points to 85.7%. Canadian same-store occupancy rose 160 basis points to 93.2%, marking the ninth consecutive quarter above 90%. Canadian same-store revenue increased 7.8% year over year, while Canadian RevPAR rose 5.9%. Costa said Sabra reaffirmed its expectation for low- to mid-teens same-store SHOP NOI growth in 2026. He said the company continued to see potential upside but wanted to retain flexibility until it had greater visibility into the second half of the year. Management attributed RevPAR growth to continued occupancy gains, operating efficiency and some pricing power. Costa said the company expects expense growth, excluding periodic items such as repairs and maintenance, to return toward the roughly 2% level seen in recent quarters. Sabra is also evaluating selected value-add SHOP investments. Costa described two opportunities encompassing six properties and approximately 713 assisted living and memory care units, with average asset age of five years. The properties are about 80% occupied, with five in Atlanta suburban markets and one in Denver. He said the opportunities could generate an expected first-year yield of about 6%, stabilized yields around 9% and internal rates of return in the teens, with assets acquired below replacement cost. Matros said Sabra’s value-add strategy is focused on assets around 80% occupied rather than properties at substantially lower occupancy levels. The company is working with existing operating partners that have demonstrated an ability to improve similar assets, he said. Total cash NOI increased to $144.3 million in the second quarter from $138.7 million in the first quarter. Managed senior housing cash NOI rose to $44.6 million from $39 million, reflecting recent investments as well as same-store occupancy, rate and margin gains. Cash rental income from the triple-net portfolio increased to $94.1 million from $89.8 million. During the quarter, Sabra exercised an option to reset rent under its Avamere lease to a fixed amount tied to the portfolio’s historical performance. The action increased annualized fixed cash rent to $48 million, retroactive to Feb. 1, 2026, compared with $41 million of cash rent paid in 2025. The Avamere reset added $3.2 million of rental revenue in the quarter, including $1.6 million of out-of-period revenue normalized in quarterly results. Several smaller rent resets, lease amendments and lease extensions added another $1.6 million of cash rental income. Costa said Sabra expects the Avamere transition to managed senior housing to close later in 2026, at which point annualized rent is expected to rise from $48 million to $53 million. He said the company expects the full $9 million of annualized benefits from other portfolio initiatives to be reflected in 2027, with $1.6 million recognized during the second quarter. Matros said triple-net skilled nursing rent coverage increased, while the company’s triple-net senior housing occupancy and coverage declined because of the transfer of a high-performing property from triple-net to SHOP. Excluding that transfer, he said results would have been roughly flat and still strong. Sabra recorded a $102.4 million provision for loan losses and other reserves, primarily related to the discounted payoff of the RCA mortgage loan discussed in its July 21 business update. The charge was excluded from normalized quarterly results. Net debt to adjusted EBITDA declined to 4.61 times as of June 30 from 5.04 times at the end of the first quarter. Costa said the decline reflected the RCA loan payoff and continued earnings growth, putting leverage below Sabra’s prior target of five times. The company ended the quarter with approximately $1.3 billion in liquidity, including $231.6 million of unrestricted cash, $682.5 million of available credit-facility borrowings and $411.8 million associated with outstanding forward sale agreements under its at-the-market equity program. On Aug. 3, Sabra’s board declared a quarterly common-stock dividend of $0.30 per share, payable Aug. 31 to shareholders of record on Aug. 14. Costa said the dividend represented a 75% payout ratio based on second-quarter normalized AFFO per share. Sabra Healthcare REIT, Inc (NASDAQ: SBRA) is a real estate investment trust that acquires, owns and operates net‐lease healthcare properties. Its diversified portfolio spans senior housing communities, skilled nursing and rehabilitation centers, outpatient medical facilities, medical office buildings, hospitals and life science properties. Sabra structures long‐term, triple‐net lease agreements with healthcare operators, providing stable rental income streams while allowing tenants to focus on patient care and operational excellence. Serving a broad spectrum of care segments, Sabra's tenants include both regional and national providers of assisted living, independent living, memory care, post‐acute rehabilitation and research and development laboratories. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Sabra Healthcare REIT Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

TUSTIN, Calif., August 03, 2026--(BUSINESS WIRE)--Sabra Health Care REIT, Inc. ("Sabra," the "Company" or "we") (Nasdaq: SBRA) today announced its results of operations for the second quarter of 2026. SECOND QUARTER 2026 RESULTS AND RECENT EVENTS Results per diluted common share for the second quarter of 2026 were as follows: EBITDARM Coverage Summary: On a year-over-year basis, same property managed senior housing Cash NOI increased 13.7% for the second quarter of 2026. In the second quarter of 2026, Sabra closed on several senior housing and skilled nursing investments for a total commitment of $274.1 million with an average initial cash yield of 8.1%. Subsequent to quarter end, Sabra closed on the acquisition of seven additional managed senior housing properties - including several value-add opportunities - for an aggregate price of $223.0 million. These investments have attractive embedded growth prospects and are expected to achieve unlevered IRRs in the teens. Investments closed year to date total $599.0 million, with an estimated initial cash yield of 7.5%. Sabra has been awarded an additional $100 million of managed senior housing and skilled nursing investments with an estimated initial cash yield of approximately 7.7%, all of which are expected to close by year end. These investments are currently in the Letter of Intent or later stage, and Sabra expects to fund these investments, if consummated, with available liquidity, including proceeds from outstanding forward sales agreements under its at-the-market equity offering program ("ATM program"). During the second quarter of 2026, Sabra exercised its option to reset the rent under its lease with the Avamere Family of Companies ("Avamere") to a fixed amount tied to the portfolio’s historical performance. The reset increased annualized fixed cash rent to $48 million and was retroactive to February 1, 2026, which compares to $41 million of cash rent paid in 2025. The revised rent amount will be in effect until the Avamere transition outlined in Sabra's July 21, 2026, business update closes. During the second quarter of 2026, Sabra utilized the forward feature of the ATM program to allow for the sale of up to 0.9 million shares of the Company’s common stock at an initial weighted average price of $20.72 per share. As of June 30, 2026, 21.4 million shares remained outstanding under forward sale agreements at a weighted average price of $19.24 per share, net of commissions. As of June 30, 2026, Net Debt to Adjusted EBITDA was 4.61x. On August 3, 2026, Sabra’s Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on August 31, 2026, to common stockholders of record as of the close of business on August 14, 2026. Sabra is also reiterating its full year 2026 guidance, which was included in Sabra’s July 21, 2026, business update. Commenting on the second quarter’s results, Rick Matros, CEO and Chair, said, "Sabra delivered another solid quarter. Our same-store managed portfolio cash NOI growth continued to be healthy. Both our consolidated and unconsolidated managed portfolio came in with strong margin growth as well as increased occupancy. Our triple-net skilled nursing portfolio rent coverage increased yet again. The triple-net senior housing portfolio saw drops in occupancy and coverage simply due to the conversion of a high-performing triple-net asset to the managed portfolio. Otherwise, it would have been flat. In aggregate, our top ten tenants again showed increased coverage. Sabra has now closed on approximately $600 million in investments this year, with another $100 million in the process of closing. Even with the addition of a few value-add opportunities, we are still getting transactions done at attractive yields. Our investment pipeline remains robust and consists almost entirely of senior housing opportunities. Our leverage, which was noted to be down to 4.8x in our recent business update, was 4.6x as of June 30. We look forward to a strong finish for the year." LIQUIDITY As of June 30, 2026, we had approximately $1.3 billion of liquidity, consisting of unrestricted cash and cash equivalents of $231.6 million, available borrowings under our revolving credit facility of $682.5 million and $411.8 million related to shares outstanding under forward sale agreements under the ATM program. As of June 30, 2026, we also had $334.1 million available under our ATM program. CONFERENCE CALL AND COMPANY INFORMATION A conference call with a simultaneous webcast to discuss the 2026 second quarter results will be held on Tuesday, August 4, 2026, at 10:00 am Pacific Time. The webcast URL is https://events.q4inc.com/attendee/256627291. The dial-in number for U.S. participants is (888) 880-4448. For participants outside the U.S., the dial-in number is (646) 960-0572. The conference ID number is 1382596. A digital replay of the call will be available on the Company’s website at www.sabrahealth.com. The Company’s supplemental information package for the second quarter will also be available on the Company’s website in the "Investors" section. ABOUT SABRA As of June 30, 2026, Sabra’s investment portfolio included 364 real estate properties held for investment (consisting of (i) 207 skilled nursing/transitional care facilities, (ii) 32 senior housing communities ("senior housing - leased"), (iii) 94 senior housing communities operated by third-party property managers pursuant to property management agreements ("senior housing - managed"), (iv) 16 behavioral health facilities and (v) 15 specialty hospitals and other facilities), 11 investments in loans receivable (consisting of one mortgage loans and 10 other loans), four preferred equity investments and two investments in unconsolidated joint ventures. As of June 30, 2026, Sabra’s real estate properties held for investment included 37,043 beds/units, spread across the United States and Canada. FORWARD-LOOKING STATEMENTS SAFE HARBOR This release contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward-looking statements. These statements may be identified, without limitation, by the use of "expects," "believes," "intends," "should" or comparable terms or the negative thereof. Examples of forward-looking statements include all statements regarding our other expectations regarding our future financial position (including our earnings guidance for 2026, as well as the assumptions set forth therein); our expectations regarding our results of operations, cash flows, liquidity, business strategy, growth opportunities, potential investments and dispositions; our expectations regarding our investment activity; our expectations regarding the proposed transition of the Avamere properties; and our plans and objectives for future operations. Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: the ability to reach a definitive agreement for awarded investments and our ability to close such acquisitions on the expected terms or at all; our ability to complete the proposed transition of the Avamere properties on the expected terms or at all; increases in market interest rates and inflation; pandemics or epidemics, and the related impact on our tenants, borrowers and senior housing - managed communities; operational risks with respect to our senior housing - managed communities; increased labor costs and labor shortages; competitive conditions in our industry; the loss of key management personnel; uninsured or underinsured losses affecting our properties; potential impairment charges and adjustments related to the accounting of our assets; risks associated with our investment in our unconsolidated joint ventures; catastrophic weather and other natural or man-made disasters, the effects of climate change on our properties and a failure to implement sustainable and energy-efficient measures; increased operating costs and competition for our tenants, borrowers and senior housing - managed communities; increased healthcare regulation and enforcement; our tenants’ dependency on reimbursement from governmental and other third-party payor programs; the effect of our tenants, operators or borrowers declaring bankruptcy or becoming insolvent; our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties; the impact of litigation and rising insurance costs on the business of our tenants; the impact of required regulatory approvals of transfers of healthcare properties; environmental compliance costs and liabilities associated with real estate properties we own; our tenants’, borrowers’ or operators’ failure to adhere to applicable privacy and data security laws; a material breach of our or our tenants’, borrowers’ or operators’ information technology; our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms; adverse changes in our credit ratings; our ability to make dividend distributions at expected levels; our ability to raise capital through equity and debt financings; changes and uncertainty in macroeconomic conditions and disruptions in the financial markets; risks associated with our ownership of property outside the U.S., including currency fluctuations; the relatively illiquid nature of real estate investments; our ability to maintain our status as a real estate investment trust ("REIT") under the federal tax laws; compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT; changes in tax laws and regulations affecting REITs; the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities; and the exclusive forum provisions in our bylaws. Additional information concerning risks and uncertainties that could affect our business can be found in our filings with the Securities and Exchange Commission (the "SEC"), including in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. We do not intend, and we undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, unless required by law to do so. TENANT AND BORROWER INFORMATION This release includes information regarding certain of our tenants that lease properties from us and our borrowers, most of which are not subject to SEC reporting requirements. The information related to our tenants and borrowers that is provided in this release has been provided by, or derived from information provided by, such tenants and borrowers. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only. NOTE REGARDING NON-GAAP FINANCIAL MEASURES This release includes the following financial measures defined as non-GAAP financial measures by the SEC: Net Debt to Adjusted EBITDA, funds from operations ("FFO"), Normalized FFO, Adjusted FFO ("AFFO"), Normalized AFFO, FFO per diluted common share, Normalized FFO per diluted common share, AFFO per diluted common share, Normalized AFFO per diluted common share, net operating income ("NOI") and Cash NOI. These measures may be different than non-GAAP financial measures used by other companies, and the presentation of these measures is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with U.S. generally accepted accounting principles. An explanation of these non-GAAP financial measures is included under "Reporting Definitions" in this release, and reconciliations of these non-GAAP financial measures to the GAAP financial measures we consider most comparable are included on the Investors section of our website at https://ir.sabrahealth.com/investors/financials/quarterly-results. REPORTING DEFINITIONS Adjusted EBITDA* Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization ("EBITDA") excluding the impact of merger-related costs, stock-based compensation expense under the Company’s long-term equity award program, and loan loss reserves. Adjusted EBITDA is an important non-GAAP supplemental measure of operating performance. Behavioral Health Includes behavioral hospitals that provide inpatient and outpatient care for patients with mental health conditions, chemical dependence or substance addictions and addiction treatment centers that provide treatment services for chemical dependence and substance addictions, which may include inpatient care, outpatient care, medical detoxification, therapy and counseling. Cash Net Operating Income ("Cash NOI")* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Cash NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines Cash NOI as total revenues less operating expenses and non-cash revenues and expenses. Cash NOI excludes all other financial statement amounts included in net income and is presented at Sabra’s pro rata share. EBITDARM Earnings before interest, taxes, depreciation, amortization, rent and management fees ("EBITDARM") for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses EBITDARM in determining EBITDARM Coverage. EBITDARM has limitations as an analytical tool. EBITDARM does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, EBITDARM does not represent a property’s net income or cash flows from operations and should not be considered an alternative to those indicators. The Company utilizes EBITDARM to evaluate the core operations of the properties by eliminating management fees, which may vary by operator/tenant and operating structure, and as a supplemental measure of the ability of the Company’s operators/tenants and relevant guarantors to generate sufficient liquidity to meet related obligations to the Company. EBITDARM Coverage Represents the ratio of EBITDARM to cash rent for owned facilities (excluding Senior Housing - Managed communities) for the period presented. EBITDARM Coverage is a supplemental measure of a property’s ability to generate cash flows for the operator/tenant (not the Company) to meet the operator’s/tenant’s related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of EBITDARM. EBITDARM Coverage includes only Stabilized Facilities and excludes facilities for which data is not available or meaningful. Funds From Operations ("FFO") and Adjusted Funds from Operations ("AFFO")* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that funds from operations, or FFO, as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts ("Nareit"), and adjusted funds from operations, or AFFO (and related per share amounts) are important non-GAAP supplemental measures of the Company’s operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions and the Company’s share of gains or losses from real estate dispositions related to its unconsolidated joint ventures, plus real estate depreciation and amortization, net of amounts related to noncontrolling interests, plus the Company’s share of depreciation and amortization related to its unconsolidated joint ventures, and real estate impairment charges of both consolidated and unconsolidated entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. AFFO is defined as FFO excluding stock-based compensation expense, non-cash rental and related revenues, non-cash interest income, non-cash interest expense, non-cash portion of loss on extinguishment of debt, provision for (recovery of) loan losses and other reserves, non-cash lease termination income and deferred income taxes, as well as other non-cash revenue and expense items (including noncapitalizable acquisition costs, transaction costs related to operator transitions and organizational or other restructuring activities, gain/loss on derivative instruments, and non-cash revenue and expense amounts related to noncontrolling interests) and the Company’s share of non-cash adjustments related to its unconsolidated joint ventures. The Company believes that the use of FFO and AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of the Company’s operating results among investors and makes comparisons of operating results among real estate investment trusts more meaningful. The Company considers FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. While FFO and AFFO are relevant and widely used measures of operating performance of real estate investment trusts, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO and AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define AFFO differently than the Company does. Investment Represents the carrying amount of real estate assets after adding back accumulated depreciation and amortization and excludes net intangible assets and liabilities. Net Debt* The principal balances of the Company’s revolving credit facility, term loans, senior unsecured notes, and secured indebtedness as reported in the Company’s consolidated financial statements, net of cash and cash equivalents as reported in the Company’s consolidated financial statements. Net Debt to Adjusted EBITDA* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers Net Debt to Adjusted EBITDA an important supplemental measure because it provides investors, analysts, and management with a meaningful indicator of the Company’s financial leverage and its capacity to service and repay debt from operating cash flows. Net Debt to Adjusted EBITDA is calculated as Net Debt divided by Annualized Adjusted EBITDA, which is Adjusted EBITDA, as adjusted for annualizing adjustments that give effect to the acquisitions and dispositions completed during the respective period as though such acquisitions and dispositions were completed as of the beginning of the period presented. Net Operating Income ("NOI")* The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company considers NOI an important supplemental measure because it allows investors, analysts and its management to evaluate the operating performance of its investments. The Company defines NOI as total revenues less operating expenses. NOI excludes all other financial statement amounts included in net income. Normalized FFO and Normalized AFFO* Normalized FFO and Normalized AFFO represent FFO and AFFO, respectively, adjusted for certain income and expense items that the Company does not believe are indicative of its ongoing operating results. The Company considers Normalized FFO and Normalized AFFO to be useful measures to evaluate the Company’s operating results excluding these income and expense items to help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized FFO and Normalized AFFO do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company’s liquidity or operating performance. Normalized FFO and Normalized AFFO also do not consider the costs associated with capital expenditures related to the Company’s real estate assets nor do they purport to be indicative of cash available to fund the Company’s future cash requirements. Further, the Company’s computation of Normalized FFO and Normalized AFFO may not be comparable to Normalized FFO and Normalized AFFO reported by other real estate investment trusts that do not define FFO in accordance with the current Nareit definition or that interpret the current Nareit definition or define FFO and AFFO or Normalized FFO and Normalized AFFO differently than the Company does. Senior Housing Senior Housing communities include independent living, assisted living, continuing care retirement and memory care communities. Senior Housing - Managed Senior Housing communities operated by third-party property managers pursuant to property management agreements. Skilled Nursing/Transitional Care Skilled Nursing/Transitional Care facilities include skilled nursing, transitional care, multi-license designation and mental health facilities. Specialty Hospitals and Other Includes acute care, long-term acute care and rehabilitation hospitals, facilities that provide residential services, which may include assistance with activities of daily living, and other facilities not classified as Skilled Nursing/Transitional Care, Senior Housing or Behavioral Health. Stabilized Facility At the time of acquisition, the Company classifies each facility as either stabilized or non-stabilized. In addition, the Company may classify a facility as non-stabilized after acquisition. Circumstances that could result in a facility being classified as non-stabilized include newly completed developments, facilities undergoing major renovations or additions, facilities being repositioned or transitioned to new operators, and significant transitions within the tenants’ business model. Such facilities are typically reclassified to stabilized upon the earlier of maintaining consistent performance or 24 months after the date of classification as non-stabilized. Stabilized Facilities generally exclude (i) facilities held for sale, (ii) strategic disposition candidates, (iii) facilities being transitioned to a new operator, (iv) facilities being transitioned from being leased by the Company to being operated by the Company and (v) leased facilities acquired during the three months preceding the period presented. *Non-GAAP Financial Measures Reconciliations, definitions and important discussions regarding the usefulness and limitations of the Non-GAAP Financial Measures used in this release can be found at https://ir.sabrahealth.com/investors/financials/quarterly-results. View source version on businesswire.com: https://www.businesswire.com/news/home/20260803120560/en/ Contacts Investor & Media Inquiries: (888) 393-8248 or [email protected]

Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St. Sabra Health Care REIT (SBRA) has drawn fresh attention after reporting first quarter 2026 earnings, reaffirming its dividend and highlighting progress in shifting more of its healthcare portfolio toward private pay senior housing. See our latest analysis for Sabra Health Care REIT. Sabra’s recent earnings release, dividend affirmation and update on portfolio repositioning have come alongside a 10.95% 90 day share price return and a 25.68% one year total shareholder return, suggesting momentum has been building over the past year. If you are comparing Sabra’s story with other opportunities in healthcare related real estate and services, it can be useful to see which peers are tied to AI driven care trends through the 33 healthcare AI stocks With the stock up strongly over the past year, trading near US$20 and sitting below a US$22 analyst target while screens flag a potential intrinsic discount, you have to ask: is there still a buying opportunity here, or is the market already pricing in future growth? With Sabra Health Care REIT last closing at $20.36 against a narrative fair value of $22.00, the most followed view now sees modest upside still on the table and ties that value directly to how senior housing demand is expected to feed through to cash flow over time. Read the complete narrative. Curious what underpins that $22.00 fair value? The narrative leans on faster revenue growth, slightly higher profitability and a future earnings multiple that still sits below many sector peers. The tension between only moderate forecast growth and a relatively full earnings valuation is at the heart of the story. Result: Fair Value of $22 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, investors also need to weigh execution risk around operator transitions and the high dividend payout ratio, which could pressure cash flow flexibility if conditions deteriorate. Find out about the key risks to this Sabra Health Care REIT narrative. Given this mix of risks and rewards around Sabra, the next move is yours. Weigh both sides carefully by checking the 3 key rewards and 2 important warning signs. Once you have formed a view on Sabra, do not stop there. Broader ideas can help you stress test your thinking and spot opportunities you might otherwise overlook. Scan for potential value opportunities by checking stocks filtered as 51 high quality undervalued stocks, which may combine quality fundamentals with pricing that has not fully reflected them yet. Prioritize resilience by reviewing companies in the 71 resilient stocks with low risk scores that score well on financial strength and business stability factors. Hunt for fresh ideas away from crowded trades through the screener containing 25 high quality undiscovered gems, where companies with solid numbers may still be under the radar for many investors. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include SBRA. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, April 30, 2026 at 1 p.m. ET President, CEO, and Chair — Richard K. Matros Chief Financial Officer — Michael Lourenco Costa Chief Investment Officer — Darrin Smith SVP, Finance — Lukas Michael Hartwich Need a quote from a Motley Fool analyst? Email [email protected] Lukas Michael Hartwich: Thank you, and good morning. Before we begin, I want to remind you that we will be making forward-looking statements in our comments and in response to your questions concerning our expectations regarding our future financial position and results of operations, including our earnings guidance for 2026, our expectations regarding our tenants and operators, and our expectations regarding our acquisition, disposition, and investment plan. These forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could cause actual results to differ materially, including the risks listed in our Form 10-K for the year ended 12/31/2025, as well as in our earnings press release included as Exhibit 99.1 to the Form 8-K we furnished to the SEC yesterday. We undertake no obligation to update our forward-looking statements to reflect subsequent events or circumstances, and you should not assume later in the quarter that the comments we make today are still valid. In addition, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as well as the explanation and reconciliation of these measures to the comparable GAAP results included on the Financials page of the investor section of our website at sabrahealth.com. Our Form 10-Q, earnings release, and supplement can also be accessed in the investor section of our website. I will now turn the call over to Richard K. Matros, President, CEO, and Chair of Sabra Health Care REIT, Inc. Richard K. Matros: Thanks, Lukas, and thanks everybody for joining us today. Starting with our deal flow, our deal flow continues to be robust. We fully expect to materially exceed February total investments. We have already closed or been awarded $400 million year to date. In addition to opportunities we see in SHOP, we are also seeing some skilled, but the ones that are appealing are off-market deals, both acquisitions and development, brought to us by existing operators. Our skilled nursing rent coverages continue to grow, as did our senior housing triple-net and behavioral, all of which hit new highs in coverage. Our occupancy growth continued in our skilled and senior housing triple-net portfolios. Our top 10 coverage is stronger than it has ever been. Our SHOP margins continue to grow, and our consolidated, unconsolidated, and same-store portfolios continue to perform. Our year-over-year same-store SHOP NOI growth came in higher than the two previous quarters. SHOP occupancy dipped slightly overall, but it was all in Canada, which had very strong year-over-year growth and currently sits at 93.4%, so almost effectively full, and there will probably be ups and downs a little bit with that portfolio. The U.S. portfolio was up 10 basis points sequentially. For the first time in the company’s history, our private pay concentration is now 50% of the portfolio. Our leverage ticked up slightly, but it is still on current target. The regulatory environment is stable. The Medicare market basket proposal is within our expectations. We expect Medicaid rates to be within expectations as well. We have a number of AI initiatives that will streamline and enhance the effectiveness of Sabra Health Care REIT, Inc.’s corporate functions. Our intent is to be an AI-enabled REIT. This, of course, is in addition to the numerous clinical pilots we have ongoing primarily in our SHOP portfolio that have been really exciting to watch evolve. We are affirming guidance, but we will be revisiting guidance in Q2 given all the current trends. And with that, I will turn the call over to Darrin. Darrin Smith: Thank you, Rick. Sabra Health Care REIT, Inc.’s managed senior housing portfolio had another great quarter with continued growth. The total managed senior housing portfolio, including non-stabilized communities and joint venture assets at share, had sequential revenue growth of 7.2% and cash NOI growth of 9.5% with margin expansion of 60 basis points. These statistics demonstrate sequential improvement in operating results that reflect the continued growth and strong performance in Sabra Health Care REIT, Inc.’s senior housing portfolio. During the first quarter, Sabra Health Care REIT, Inc. invested $102 million, adding three properties to Sabra Health Care REIT, Inc.’s managed senior housing portfolio, one skilled nursing community, and a preferred equity investment in a senior housing development. Subsequent to quarter end, Sabra Health Care REIT, Inc. invested an additional $14.1 million, adding two properties to Sabra Health Care REIT, Inc.’s managed senior housing portfolio and the redevelopment of a senior housing community, bringing total year-to-date investments to roughly $206 million with an estimated initial cash yield of 8%. Additionally, Sabra Health Care REIT, Inc. has another $107 million of additional awarded managed senior housing and $94 million of awarded skilled nursing investments, most of which should close in the second quarter. In addition to the over $400 million in closed and awarded investments, Sabra Health Care REIT, Inc. has an additional $690 million of managed senior housing investments that we are actively pursuing. On a year-over-year basis, Sabra Health Care REIT, Inc. added 21 assets to our managed senior housing portfolio, a nearly 25% increase by number of assets and 62% increase in total managed senior housing NOI. Deal flow shows no signs of slowing, and Sabra Health Care REIT, Inc. remains competitive on new investments. As our investment pipeline continues to be extremely active, particularly in managed senior housing, we have remained focused on ensuring the foundation underneath is built to accommodate that growth. Over the past several quarters, we have been advancing automation, data, and AI-enabled initiatives to support faster, more consistent decision making, deeper operating insights across the portfolio for us and our operators, and, importantly, meaningfully increase the scalability of our platform. This is a continuation of how we have evolved the platform over the decade, and we view it as an accelerator of portfolio and earnings growth as well as long-term value creation. Moving on to the same-store portfolio, Sabra Health Care REIT, Inc.’s same-store managed senior housing portfolio, including joint venture assets at share, continued its strong performance in the first quarter. The key numbers are: revenue for the quarter grew 7.9% year over year, with our Canadian communities growing revenue by 9.6% in the same period. First-quarter occupancy in our same-store portfolio was up 280 basis points to 88.4% year over year. Notably, our domestic portfolio occupancy increased 280 basis points to 85.6% during that period, while our Canadian portfolio grew 270 basis points to 93.4% in the same period, marking the eighth consecutive quarter where occupancy was over 90%. RevPAR in the first quarter continued to rise with an increase of 4.6% year over year, with our Canadian portfolio increasing 6.5% in the same period. While RevPAR and occupancy continue to grow, expense per occupied room increased only 1.8% for the same period, providing for cash NOI growth of 14.4% on a year-over-year basis. With over $400 million in closed and awarded investments to date, a very robust pipeline, and industry tailwinds at our backs, we should continue to see solid growth in our portfolio. Our net-leased senior housing portfolio continues to do well with continued strong rent coverage. I will now turn the call over to Michael Lourenco Costa, Chief Financial Officer of Sabra Health Care REIT, Inc. Michael Lourenco Costa: Thanks, Darrin. For the first quarter of 2026, we recognized normalized FFO per share of $0.38 and normalized AFFO per share of $0.39, which represents a 9% to 5% increase respectively over the same periods in 2025. In absolute dollars, normalized FFO and normalized AFFO totaled $96.1 million and $100.6 million this quarter, respectively. Cash NOI from our triple-net portfolio increased $2.2 million from last quarter, primarily due to annual rent escalators and increased collections from certain cash-basis tenants. Cash NOI from our managed senior housing portfolio totaled $39 million for the quarter, compared to $35.6 million last quarter. This $3.4 million increase was primarily the result of recent investment activity together with sequential growth in our same-store portfolio. Interest and other income was $10 million for the quarter, compared to $10.6 million last quarter. This decrease was primarily due to paydowns received during the quarter and lower interest income on our cash balances. Cash interest expense was $26 million, compared to $26.6 million last quarter. Normalized cash G&A was $11 million this quarter, compared to $10.6 million last quarter. This increase was primarily related to hosting our 2026 operator conference last month. Subsequent to quarter end, we completed the disposition of three skilled nursing facilities in Maryland leased to CommuniCare for gross proceeds of $79.4 million, equating to a 6.8% lease yield. These facilities were classified as held for sale as of 03/31/2026. As noted in our earnings release, we have reaffirmed our previously issued 2026 earnings guidance, and the results for this quarter are in line with our assumptions underlying that guidance. Now briefly turning to the balance sheet, our net debt to adjusted EBITDA ratio was 5.04x as of 03/31/2026, and continues to be in line with our targeted leverage. As we have stated previously, while we are comfortable with our leverage level, we will continue to assess opportunities to reduce leverage over time where doing so supports our continued focus on strong year-over-year earnings growth. As of 03/31/2026, the cost of our permanent debt was 3.92%, and the weighted average remaining term on our debt was approximately four years, with the next material maturity being in 2028. Additionally, we have no floating-rate debt exposure in our permanent capital stack, with the only floating-rate debt being borrowings under our revolving credit facility. As Darrin noted, our pipeline of investment opportunities has remained extremely active, and that has coincided with continual improvements in the cost of our equity capital. Accordingly, we have been actively utilizing the forward feature under our ATM to lock in this attractive cost of capital to fund our investment pipeline. During the quarter, we issued $128 million on a forward basis at an average price of $20.19 per share after commissions, and in total, we have $451 million outstanding under forward contracts at an average price of $19.03 per share after commissions. We expect to use a portion of the proceeds from the outstanding forward contracts, together with the proceeds from the CommuniCare asset sales, to close on the investments we have been awarded on a leverage-neutral basis while still retaining meaningful dry powder to fund additional investments. As of 03/31/2026, we are in compliance with all of our debt covenants and have ample liquidity of approximately $1.2 billion, consisting of unrestricted cash and cash equivalents of $117 million, available borrowings under our revolving credit facility of $645 million, and the $451 million outstanding under forward sales agreements under our ATM program. As of 03/31/2026, we also had $353 million available under the ATM program. Finally, on 04/29/2026, Sabra Health Care REIT, Inc.’s board of directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on 05/29/2026 to common stockholders of record as of the close of business on 05/15/2026. The dividend is adequately covered and represents a payout of 77% of our first-quarter normalized AFFO per share. We will now open the call for questions. Operator: Simply press star 1 again. Your first question comes from the line of William John Kilichowski from Wells Fargo. Your line is open. William John Kilichowski: Hi. Thanks for taking my question. Rick, really appreciate the opening remarks. It sounds like it was a great quarter all around on the SHOP side. You got the acquisitions done. Looking at the guide being held still here, what is the reason for the conservatism there? I understand that is typical in Q1 for you. But it sounds like things are working, and I understand future acquisitions are not considered. What would it take at this point to get to the lower or midpoint? Richard K. Matros: Yes, we are typically conservative this early in the year. But all the trends are obviously going in the right direction. You see the yields that we are investing in, so that looks good for us as well. So it is really just as simple as that. We will reevaluate earnings guidance for the second quarter. William John Kilichowski: Okay. And then on the opening remarks, you have the $200 million awarded. If you could talk to maybe a cadence of that closing and then beyond that, the $690 million. If you think about deals historically that have been in that level of the funnel, what has been your historical rate of execution on those deals? Just trying to distill what might be the final number that you execute on. Richard K. Matros: I will make one comment then hand it over to Darrin. The $200 million, from our perspective, will close. I do not have any doubt or concern about the $200 million. Darrin? Darrin Smith: With respect to the $690 million, these are investment opportunities that we are actively pursuing, including opportunities where we have submitted an initial LOI and are moving forward in the process. As far as the probability of success, it is hard to tell because it is a bit of a competitive environment, but we would expect to close on a fair number of that investment opportunity. Richard K. Matros: The volume is so high, John, there really has not been a precedent for this in terms of trying to be a little bit more predictive about what percentage of deals we will close on. But it will be a good enough percentage that, as I said in my opening remarks, we will exceed pretty materially how much we did last year. William John Kilichowski: Very helpful. Thanks, Rick. Richard K. Matros: Yes. Operator: Your next question comes from the line of Farrell Granath from Bank of America. Your line is open. Farrell Granath: Thank you so much. I first wanted to ask about your pipeline also. What percentage of that are you sourcing off market or just through your relationships, and what percentage is through marketed deals? Richard K. Matros: I do not have the exact percentages, but on the skilled nursing side, it is 100% off market through existing relationships. On the senior side, maybe say 20%. We do have existing relationships that bring us off-market deals, but the bulk of the pipeline that we have is marketed. And I also just want to note on the CommuniCare sale, that is not indicative of us aggressively looking to sell skilled assets. This is a very unique situation where CommuniCare approached us wanting to exit Maryland, which is not an easy state. We actually had other buildings in Maryland that we exited several years ago. There are a lot of markets in Maryland that are over-bedded, so we were happy to work with CommuniCare on that. And CommuniCare is also one of our operators that we are doing some of these off-market things with. Farrell Granath: Okay. Thank you. And also wanted to touch on the expense per occupied room growth that you highlighted, the 1.8%. Is that being driven just based on the operating leverage where you are in your occupancy? Or were there other puts and takes that are going into that number? Richard K. Matros: It is the operating leverage. So we would expect it to continue at levels that low for the foreseeable future. Farrell Granath: Great. Operator: Your next question comes from the line of Austin Todd Wurschmidt from KeyBanc. Your line is open. Austin Todd Wurschmidt: Great. Thanks. Just within the SHOP portfolio, just wondering how you are feeling about the exit velocity and kind of leading indicators from March looking into April and May. I think you surpassed the one-year anniversary this month since transitioning the communities away from Holiday. What is the latest update and trajectory of that portfolio? Richard K. Matros: Yes, it is definitely getting better. We are not disclosing the numbers on that, but it is progressing. You probably noted there was a slight change in same store, and that is just a function of having had these new operators in that portfolio for a year now. We determined that a few of those assets are assets that we no longer want to retain in the portfolio. Austin Todd Wurschmidt: Yes, that is helpful. And how deep is the set for SHOP investments in that 8% yield range? And can you provide some characteristics around the size and vintage of the facilities that you acquired in the first quarter as well as what is in that awarded pipeline? Darrin Smith: There is definitely some cap rate pressure. Most of what we see on the market and the opportunities right now are in the low 7% range. What we closed on is IL, AL, and memory care, although it is more heavily weighted to AL and memory care. On vintage, these are roughly 14 years old on average. With respect to the $690 million that I mentioned, that has an average age of eight years, and also low 7% for those that are more stable. But we are also looking at some slight value-add opportunities where there is lower occupancy but a clear line of sight to stabilization. Some of those we are looking at will have initial yields in the 6s but should provide more meaningful IRRs with the upside opportunity. Richard K. Matros: And as you know, we focus on secondary markets, so we are not seeing the same level of cap rate compression in the secondary markets as you all see in the primary markets. Austin Todd Wurschmidt: Very helpful. Thanks for the time. Operator: Your next question comes from the line of Juan Sanabria from BMO Capital Markets. Your line is open. Juan Sanabria: Hi. Good morning. Just hoping you could talk a little bit more about those SHOP assets that you transitioned last year that you are now looking to sell. If you can comment on the book value or the expected proceeds, and if you had not excluded those from the same-store pool, do you know what SHOP same-store NOI would have been for the quarter on a year-over-year basis? Richard K. Matros: We are just selling those right now, so we do not know what the outcome is going to be. We are not disclosing any of that information at this point. A couple of quarters ago, when we talked about the transition of that portfolio, we did say that we would be evaluating the viability of retaining all these assets going forward. That is just a normal process. But we are not breaking out all these different portfolios in terms of the individual growth of SHOP NOI in these portfolios. Juan Sanabria: And to just to confirm, these were old original Holiday assets. Is that fair? Richard K. Matros: Yes, they are. Juan Sanabria: Okay, great. Richard K. Matros: It is three assets that we are selling, and we brought another Holiday asset into same store that had stabilized. Juan Sanabria: Great. And just to switch gears, appreciate that. Thanks, Rick. Just on the behavioral, could you give an update on Landmark that was in the press and any updated thoughts on how we should be thinking about the RCA loan? Richard K. Matros: Sure. And we always reserve the RCA question for you, Juan, just so you know. Juan Sanabria: Special. Richard K. Matros: On Landmark, we have been working with them. They are in the court system for an exit with those facilities, and we were able to help bring somebody in to buy a bunch of the assets. The Landmark team is buying some of the assets themselves. We were able to get a price that was actually pretty attractive from our perspective. Outside of that group of Landmark assets, we have three others that we are in the process of selling as well. So we will have some more proceeds to add to the ones that you saw in the article. We hope to make an announcement on that before our second quarter call. And if that is the case, we will do so. As I mentioned on the last call, Deerfield—this is their biggest investment—they really believe in the portfolio, and our talks are very constructive. Michael Lourenco Costa: And on NOI or rent collected related to Landmark, there is somewhere around, like, $1.5 million that we collected in the first quarter, and we would expect that same run rate through whenever these assets ultimately transact. Juan Sanabria: Thank you. Operator: Your next question comes from the line of Seth Eugene Bergey from Citi. Your line is open. Seth Eugene Bergey: Hi, thanks for taking my question. You mentioned in the prepared remarks some AI initiatives. Could you expand on some of those and how you are using AI within the platform? And maybe talk about what differentiates the Sabra Health Care REIT, Inc. platform from an AI perspective versus some of the peers that are also competing in the SHOP and skilled business? And then maybe just a little bit on the deal flow and the opportunity set—what is the mix between SHOP and skilled of the opportunity set, and are there any particular geographies you are looking at? Darrin Smith: I will take that one, Seth. At a corporate level, as I mentioned, we have been leaning into automation and AI over the last several quarters. Primarily at the core level, it has been to speed up back-office workflows and data processing, primarily in our SHOP portfolio. At the same time, we are advancing initiatives that will further reduce manual processes and accelerate analysis. Not the sexiest thing in the world, but it is very impactful, particularly as it improves how we interact with our operators and what kind of value we can give back to our operators in the form of data and insights. It could have some really meaningful benefits, not only to us, but to our operators as well. And then, as Rick mentioned, we have pilots going on at the facility level. In addition to several prop-tech solutions that have already been deployed, there are a whole bunch of other solutions like medical records and fall detection that are leveraging AI to make operations more efficient and, more importantly, improve resident care. On the opportunity set, nothing has really changed. It is still, I would say, 95%+ SHOP in the opportunity set. The skilled nursing investments and opportunities that we have announced were all done off market with direct relationships. We still do not see that much volume in the skilled space, and when you do, it is very heavily competitive, and the private groups tend to be able to pay up a little bit more. Richard K. Matros: Remember the private buyers that we are all up against are buying OpCo and PropCo, and they also are feeding ancillary businesses. So as a buyer of real estate, we just cannot compete with that. And there is not enough volume out there for everybody to go around on skilled as there is on SHOP—or there was on skilled if you go back to prior to the pandemic when there was enough for everybody to go around. At this point, we do not see that changing at least for a while. A lot of it is a function of operators who do not have to sell but got really slammed during the pandemic and had pretty huge losses. Now you have had a couple of years of some really good performance, and that performance will continue to improve. So I think for a lot of the operators out there that do not have to sell that normally would put their assets on the market, they are just recouping, and they are probably enjoying some really nice cash flow that was not the case a few years ago. Maybe we will see that change later on in the year going into 2027, but it is a little hard to tell. On the SHOP side, as far as the markets are concerned, we are still looking at secondary markets as the focus here. And as far as the volume is concerned, it is showing no signs of slowing whatsoever. In fact, it actually feels like it is picking up speed. And we are geographically agnostic in terms of what states we will be in for either class. Seth Eugene Bergey: Great. Thanks. Operator: Your next question comes from the line of Michael Lee Stroyeck from Green Street. Your line is open. Michael Lee Stroyeck: Thanks, and good morning. Maybe following up on that question and just going back to the strong pricing on the CommuniCare sale, and your comments on not being able to compete as well in the SNF transaction market, what sort of yields or multiples are you seeing there on those marketed SNF deals? And how different is that versus the typical 9% to 10% lease yields we see in SNFs? Richard K. Matros: There is not a lot of data out on that. The problem is they are all private deals. I do not really have a good answer for that. Darrin, I do not know if you have seen anything. Darrin Smith: No. I mean, it is definitely a couple hundred basis points inside of what the standard skilled nursing transaction would typically run at. Michael Lee Stroyeck: Got it. Okay. And then going back to the behavioral health discussion, one of your peers had talked about labor being a challenge within that business. Are you experiencing a meaningfully tougher labor backdrop within behavioral health versus other areas of the portfolio? Richard K. Matros: No, not at all. I am a little bit surprised to hear that. We have not seen that at all in our portfolio. Michael Lee Stroyeck: Understood. Thanks for the time. Operator: Your next question comes from the line of Alec Gregory Feygin from Baird. Your line is open. Alec Gregory Feygin: Can you comment on how the opportunity set of funding for development and redevelopment projects has trended? Do you expect this to be a bigger part of your investment activity going forward? And are these development opportunities also in secondary or tertiary markets? Darrin Smith: As far as developments, we still see a fair amount of development opportunities that come in. I would say of those development opportunities, maybe 10% pencil. When I say pencil, we are looking for a stabilized return on cost on the development to be 200 to 250 basis points wider than the current market cap rate equivalent. Maybe only 10% of those meet that. I do expect that it is going to pick up, but not meaningfully for some period of time. The one private equity development that we announced is in Indiana, and the other is actually a redevelopment of a former SNF property that was shut down, and we are redeveloping that into a senior housing property in Kentucky. Alec Gregory Feygin: Got it. Thanks for the time. Operator: Your next question comes from the line of Vikram L. Malhotra from Mizuho Securities. Your line is open. Vikram L. Malhotra: I want to go back to the question on the guide. The cadence of FFO or AFFO—if you take your quarterly number and multiply it by four, you are very easily in the range. So I am wondering if there are one-time items, maybe this loan that you have got baked in, any other asset transition or sale. What should we infer is a pretty steady number? If you can give us any more color on other puts and takes for the year that we should be modeling? Michael Lourenco Costa: As you rightly pointed out, if you take our first-quarter results and annualize them, they are right at—or if you do it on actual dollars and run the math out, you are probably just slightly below—where our midpoint is. So there is that data point. The other data point is we guided towards low- to mid-teens same-store NOI growth in our SHOP portfolio, and we came in at 14%, right in the middle of that range. As we have talked about many times before, the biggest driver of where we end up landing from an earnings perspective, especially relative to our guidance range, is going to be dictated by our SHOP NOI growth. Given that our current quarter earnings are right at the midpoint or even slightly below the midpoint, and given that our SHOP growth is right where we guided for the full year, and we reaffirmed our guidance—let us not lose sight of that—we still feel as we sit here today, two months after we put our initial guidance out, that reaffirming what we put out previously still makes sense. As Rick mentioned, we have historically taken the approach that in Q1 we are not going to generally revisit guidance unless there is some material change one way or another. There has not been, and we are going to reevaluate it in Q2 as we have a better line of sight into what the SHOP growth is going to look like for the year and as our investment pipeline takes greater form. Richard K. Matros: And we totally get the questions, particularly since some of our peers raised guidance in some form or fashion over this past week. We totally get it, but we like the trends we are seeing, as I said earlier. We like the volume that we are seeing, and we like the yields we are getting things done in. So we will see how it goes. Vikram L. Malhotra: Okay. And then, I am not reading into the CommuniCare pricing, but in general, there seems to be downward pressure on cap rates for SNFs, given the hope to improve the operations. Is there an opportunity for you, given your desire for SHOP, to do a bigger portfolio sale in SNFs—$500 million, $1 billion—and recycle that into SHOP? Richard K. Matros: I am not sure there is downward pressure on cap rates because of the private buyers. The REITs are pretty disciplined about holding firm on the cap rates that we have historically acquired SNFs at. We like the fact that we have a very strong triple-net skilled nursing portfolio. We are at all-time highs on rent coverage. We are at all-time highs on margins. Occupancy continues to grow, so there is still upside there. It is a base that we have that everybody can depend on. And then the SHOP side, which gets bigger and bigger for us, obviously provides more outsized earnings growth. So we like having that balance. Our portfolio today is better balanced than it has ever been. For us to pass the 50% mark on private pay revenues is a material change. We started out as a 96% skilled REIT. We have evolved quite a bit, but we are not going to sell portfolios that we think are really good just to shift the percentages of SHOP. We have plenty of access to capital and plenty of liquidity available to invest in all the SHOP opportunities that we have ahead of us. Vikram L. Malhotra: Okay. And then if I can just clarify, Rick, I think you said the Canadian portfolio is 93%. You think it is essentially full. But in this environment, a lot of folks are talking about 95%+. Is 93% the peak for the Canadian portfolio in absolute? Richard K. Matros: No, not necessarily. I just think when you start to get to the mid-90s, you will have some ups and downs. We have a facility up there that is 100% almost all the time. That is unusual, but it happens. We had a 270-basis-point year-over-year growth in that Canadian portfolio, so we expect occupancy to continue to trend up there. But it is not going to be at the same velocity as if it was still 85% or 86%. Vikram L. Malhotra: Okay. Thank you. Richard K. Matros: Yep. Operator: Your next question comes from the line of Richard Anderson from Cantor Fitzgerald. Your line is open. Richard Anderson: Thanks. Good morning. On CommuniCare, you are selling or sold—Omega is selling, I think, to CommuniCare, if that is—correct me if I am wrong about that. And if I am— Richard K. Matros: No, that is not right. Richard Anderson: Okay. In their case, I believe that is the case. But both are Maryland. I am just curious, is there any dotted line between what Omega is doing and what you are doing that you could share on CommuniCare, and if there is some sort of trend that we can draw from both of those transactions? Richard K. Matros: I do not really think so. They were hoping to get cooperation from both us and Omega. They just really want to exit a state that was a really, really tough state for them and thought it would strengthen their portfolio overall. We are seeing that as a result. When they first called us, it resonated with us because, as I said earlier, we shed facilities in Maryland several years ago. It is tough there. I do not think there is any trend here. CommuniCare still wants to grow. As I said earlier, we are seeing some growth with them. Omega may or may not be as well. But no dotted lines or anything like that, other than we think the Omega team is a great team. Richard Anderson: Fair enough. Rick, no guidance update, which is fine with me, but also no change to your target SHOP. I think it was 40% as of last quarter. Let us say you bite into this $690 million to a certain degree between now and three months from now. Are you closing in on 40%, and might we have an update on a new target for SHOP this time in three months? Richard K. Matros: If we say we are to do $1 billion this year, we definitely are going to be in pretty good shape in terms of the 40%. But then we will just set a higher target. As I said earlier, we are not going to shed any sort of major skilled portfolios. There is always some stuff that you sell, so between some of that—which is probably incremental on the margin—and almost all of our investment activity being on SHOP, you are just going to continue to see skilled being a smaller percentage of the portfolio and SHOP continuing to grow. We do not have any guardrails about how much we want to do in SHOP. We have been doing SHOP for over ten years, and with all the improvements we are making in the existing platform, with our AI initiatives, our platform is going to be more scalable than it has ever been. We will be able to continue to grow our SHOP exposure, and the amount of G&A we will have to add as a result of that will be lower than it normally would have been in the absence of the AI initiatives. Richard Anderson: Okay, great. And last for me—more of a theoretical big-picture question. A lot of your peers are taking a SHOP-on goal, working in individual silos. You guys have been doing it for a while, so not a conversation about Sabra Health Care REIT, Inc. in particular. What do you think about the potential that there will be some sort of combination activity to attack the SHOP opportunity? It seems like it makes sense. It is a business that requires scale. Richard K. Matros: Are you talking about M&A activity with the REITs? Richard Anderson: Yes. Richard K. Matros: Look, we all know there are too many of us. Now with everybody jumping on the SHOP bandwagon—it is like a new form of breakfast cereal or something that everybody likes better now—the only concern I have: there is a lot of mutual respect in our space. All of our teams, we all know each other really well. We hang together when we have the opportunity. There is plenty to go around. I just hope people are prudent in making sure they have the infrastructure in place to support the operators and to assess the quality of deals that are being looked at. This is much, much different than a triple-net business. For us, we have been able to be successful not just because we have been doing it for a long time, but as most others know, our entire asset management team are operators. So the transition for them to work from triple net to SHOP really was not that difficult. You get a little bit concerned about missteps with everybody jumping into it. Hopefully that will not be the case. As far as M&A activity, you are right—there should be some M&A activity, but it seems like that is hard to make happen in REIT world. Richard Anderson: Fair enough. Okay. Thanks very much. Operator: Your next question comes from the line of Michael Goldsmith from UBS. Your line is open. Michael Goldsmith: Good afternoon. Thanks a lot for taking my question. Maybe first, can you comment on the Medicare rate proposal for 2027 of [inaudible]. Maybe we can get your high-level outlook on Medicare and Medicaid and just the overall health of reimbursement. Richard K. Matros: Sure. I will give myself a little credit because I did predict that the Medicare market basket would have a two handle, and I predict that the Medicaid rate increases in the aggregate will have the three handle. It really did meet our expectations. Coming off of the pandemic and the extraordinarily high inflation that we saw during the pandemic, everything is normalizing, and we should expect to see rates, both on the Medicaid and the Medicare side, revert back to the historical norm before the pandemic. That is what we are seeing. I think Medicare and Medicaid rates peaked in 2024. They were still really healthy last year, but we did see them come down quite a bit last year. It is all formulaic, so it is pretty normal stuff. While you cannot predict the exact number, the trend is pretty apparent. Michael Goldsmith: Got it. Thanks for that. And then doing a little math, which can always be a little bit of a dangerous thing, from your occupancy and unit numbers in the supplement, we estimate your non-same-store SHOP occupancy is in the high 70s percent. Could you add a little color on the types of SHOP assets you have been accumulating over the past year? It looks like these have been unstabilized with occupancy upside, and if you could talk about what markets the assets are in and the unit mix, that would be helpful. And when do you expect some of these AI initiatives to translate to measurable financial outcomes like lower G&A or higher margins or better asset-level decision making? Darrin Smith: For the entire senior housing managed portfolio for the quarter ended, occupancy for the entire portfolio is 85.6%. As far as the assets we have been acquiring, we have been acquiring assets in the upper 80s to low 90s percent occupancy. I am not sure where you are getting the 70% math, but we can follow up offline. From a G&A perspective, I would not expect there to be a ton of G&A savings. What is going to be more impactful from a G&A standpoint is it will slow down the ramp of G&A as we grow. That is the right way to look at it, and that will be incremental and ongoing as we speak. We are in the middle of a lot of these initiatives, and as they continue to be implemented, we are going to see real benefits to how we operate and how we scale as a company. Additionally, as we continue to roll out this information to our operators and give them better insights into their own businesses and help them operate their facilities better, we firmly believe there is going to be a tangible improvement in their performance. When and how quickly is hard to tell at this point. Richard K. Matros: It is also going to make it easier for us to absorb the increased level of volume on investments that we are seeing. We do have some 90-day milestones in place, so we will start to see some benefits in the near term with the initiatives that we have. Michael Goldsmith: Thank you very much. Good luck in the second quarter. Richard K. Matros: Thank you. Operator: Your next question comes from the line of Omotayo Tejumade Okusanya from Deutsche Bank. Your line is open. Omotayo, your line is open. Omotayo Tejumade Okusanya: Good morning out there. I wanted to continue along the lines of the Medicare/Medicaid questions and, Rick, get your thoughts around CMS’s increased focus on value-based care programs on the Medicare Advantage side. What are you hearing from your operators about how it is impacting referral rates from hospitals or how they may be changing their business and how they are responding? Richard K. Matros: Thanks, Tayo. We are not seeing that much impact yet, but we are really bullish on value-based care. We are working with our operators. Some of our operators are already pursuing it and have agreements in place. There are different levels that you can do with the insurers. You can have arrangements with ACOs. There are a lot of different levels of arrangements that you can have with value-based care that have different levels of risk, starting with upside but no downside. As they get better and better, they will take on some downside risk, but they will have more upside. We think it is a really big deal. It is great for the space because we know our operators can take care of patients that are being cared for in much higher-cost settings like LTACHs or rehab hospitals with really good outcomes. Last month, we had our operators conference and value-based care was a central topic. There was a lot of excitement from our operators. There are also similar opportunities for senior living as well—it is not just skilled. There may be more there for skilled, but there are opportunities with insurers and ACOs, particularly on the senior housing side as well. One of our board members, Lynne Katzmann, who runs the senior living company Juniper, is probably front and center—further ahead—on those kinds of initiatives with AI and memory care than anybody else in the space. Her expertise has been great as well. We are really excited about that. Omotayo Tejumade Okusanya: Gotcha. How do we juxtapose that versus comments coming out during this earnings season when some of the hospital names are saying it is helping them reduce referrals to skilled nursing and things of that nature? Richard K. Matros: I think it is a function of whether you are going to embrace what is inevitable and make sure you have the clinical products in place to take advantage of that. Then you will have increased referrals. If you have operators that are more passive, it is not going to go your way, because as more time goes by, insurers and ACOs are going to have more opportunities to divert patients to operators that are really embracing these opportunities. Analyst: Makes sense. Omotayo Tejumade Okusanya: Thank you very much. Richard K. Matros: Yes. Operator: Again, if you would like to ask a question—your next question comes from the line of Austin Todd Wurschmidt from KeyBanc. Your line is open. Austin Todd Wurschmidt: Great. Thanks for taking the follow-up. I want to go back to make sure I understand some of the components of guidance. The $1.5 million of income received from Landmark in the first quarter—was that contemplated in initial guidance, or is that a source of upside when you reevaluate guidance in the coming quarters? And is it appropriate to annualize the first-quarter number given your plan to sell those assets? Michael Lourenco Costa: To answer your first question, the $1.5 million was included in our original guidance. In terms of annualizing that, it is something that is going to go away at some point this year. Probably, I would say, end of the second quarter is when we would realistically think that would go away, but it could slip as well. It is not something we expect to have in there for the entire 12 months, if that is what you are asking. Austin Todd Wurschmidt: No, that is helpful. Thank you. Operator: And that concludes our question and answer session. I will now turn the call back over to Richard K. Matros for closing remarks. Richard K. Matros: Thanks everybody for your time today and continuing support. We look forward to seeing a lot of you at the Wells conference and at NAREIT in June. Thanks very much. Have a great day. And for any moms that are on the call, happy Mother’s Day. Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect. Before you buy stock in Sabra Health Care REIT, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sabra Health Care REIT wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Sabra (SBRA) Q1 2026 Earnings Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Normalized FFO per Share: $0.38, a 9% increase over the same period in 2025. Normalized AFFO per Share: $0.39, a 5% increase over the same period in 2025. Normalized FFO: $96.1 million for the first quarter of 2026. Normalized AFFO: $100.6 million for the first quarter of 2026. Cash NOI from Managed Senior Housing Portfolio: $39 million, up from $35.6 million last quarter. Cash NOI from Triple Net Portfolio: Increased by $2.2 million from last quarter. Same-Store Managed Senior Housing Revenue Growth: 7.9% year-over-year. Same-Store Portfolio Occupancy: Up 280 basis points to 88.4% year-over-year. RevPOR Growth: 4.6% year-over-year. Cash NOI Growth: 14.4% year-over-year. Net Debt to Adjusted EBITDA Ratio: 5.04x as of March 31, 2026. Cost of Permanent Debt: 3.92% as of March 31, 2026. Liquidity: Approximately $1.2 billion as of March 31, 2026. Quarterly Cash Dividend: $0.30 per share, representing a payout of 77% of first quarter normalized AFFO per share. Warning! GuruFocus has detected 12 Warning Signs with SBRA. Is SBRA fairly valued? Test your thesis with our free DCF calculator. Release Date: April 30, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sabra Health Care REIT Inc (NASDAQ:SBRA) reported robust deal flow, expecting to exceed 2025's total investments with $400 million already closed or awarded year-to-date. The company's skilled nursing rent coverages and senior housing, triple net, and behavioral portfolios hit new highs in coverage. Sabra's managed senior housing portfolio showed strong performance with a 7.2% sequential revenue growth and a 9.5% cash NOI growth. For the first time, Sabra's private pay concentration is over 50% of the portfolio, indicating a shift towards more stable revenue streams. The company is actively pursuing AI initiatives to streamline operations and enhance decision-making, aiming to become an AI-enabled REIT. SHOP occupancy dipped slightly, particularly in Canada, although it remains high at 93.4%. Leverage increased slightly, though it remains within the company's target range. Interest and other income decreased from the previous quarter due to paydowns and lower interest income on cash balances. The company is facing cap rate pressure in the SHOP market, with most opportunities in the low 7% range. There is uncertainty in the skilled nursing facility (SNF) transaction market, with private buyers often outbidding REITs. Q: Rick, with the strong performance in the SHOP segment, why is the earnings guidance still conservative? A: Richard Matros, CEO, explained that the company typically maintains a conservative stance early in the year. While trends are positive, they plan to reevaluate the guidance in the second quarter. Q: Can you discuss the $200 million in awarded investments and the likelihood of closing on the $690 million pipeline? A: Richard Matros, CEO, confirmed confidence in closing the $200 million. Darrin Smith, EVP, noted that while the $690 million pipeline is competitive, they expect to close a fair number of those opportunities. Q: What percentage of your investment pipeline is sourced off-market versus marketed deals? A: Darrin Smith, EVP, stated that 100% of skilled nursing deals are off-market through relationships, while about 20% of senior housing deals are off-market, with the rest being marketed. Q: How are the AI initiatives expected to impact Sabra's operations? A: Michael Costa, CFO, mentioned that AI is being used to streamline back-office workflows and data processing, particularly in the SHOP portfolio, which will improve operational efficiency and decision-making. Q: Can you provide an update on the SHOP assets transitioned from Holiday and their current status? A: Richard Matros, CEO, noted that some assets are being evaluated for sale, and the company is not disclosing specific financial details at this time. The transition is part of a normal evaluation process. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Management described a robust deal pipeline with roughly $400 million closed or awarded year-to-date, Q1 investments of $102 million plus $104.1 million post-quarter (YTD ≈ $206M), and an actively pursued ~$690 million pipeline with about $200 million of awarded deals expected to close in Q2. Managed senior housing operating performance strengthened materially, with same-store revenue up 7.9% YoY, occupancy up 280 bps to 88.4%, and same-store cash NOI up 14.4%, which management called a key swing factor for results versus guidance. Sabra reported normalized FFO/AFFO per share of $0.38/$0.39 (up 9%/5%), declared a quarterly dividend of $0.30 (77% of AFFO), reaffirmed 2026 guidance while noting it may revisit in Q2, and ended the quarter with about $1.2 billion of liquidity and net debt/adjusted EBITDA of 5.04x. Interested in Sabra Healthcare REIT, Inc.? Here are five stocks we like better. 6 largest healthcare REITs to buy and how to invest Sabra Healthcare REIT (NASDAQ:SBRA) executives highlighted accelerating investment activity, improving operating metrics across key portfolios, and a stable reimbursement and regulatory backdrop during the company’s first-quarter 2026 earnings call. Management also reaffirmed full-year 2026 guidance while signaling it may revisit expectations in the second quarter as trends develop. CEO Rick Matros said Sabra’s deal pipeline “continues to be robust” and that the company “fully expect[s] to materially exceed 2025’s total investments.” He added Sabra has “already closed or been awarded $400 million year to date.” → Corning Beats Q1 Estimates but Drops 9% on Guidance Miss Nursing Home REITs: The Surprise Heroes of High Yield Investing Darren (a company representative) detailed investment activity, saying Sabra invested $102 million in the first quarter, adding three properties to the managed senior housing portfolio, one skilled nursing community, and a preferred equity investment in a senior housing development. After quarter end, Darren said Sabra invested another $104.1 million for additional managed senior housing assets and a redevelopment, bringing year-to-date investments to roughly $206 million with an estimated initial cash yield of 8%. → Is Oracle Undervalued as Cloud Growth Accelerates? Darren also outlined the near-term pipeline and longer-term funnel: $107 million of additional “awarded” managed senior housing investments and $94 million of awarded skilled nursing investments, “most of which should close in the second quarter.” An additional $690 million of managed senior housing investments Sabra is “actively pursuing.” In Q&A, Matros said the $200 million of awarded deals (referencing the awarded pipeline discussed on the call) should close, stating, “We don’t have any doubt or concern about the 200.” Darren cautioned that the larger $690 million pipeline is competitive, but said Sabra would expect to close “a fair number” of those opportunities. → The $880M Bet to Survive Real Estate's Reset Management emphasized continued strength in the managed senior housing (“SHOP”) portfolio. Darren said the total managed senior housing portfolio (including non-stabilized communities and joint venture assets) posted sequential revenue growth of 7.2% and cash NOI growth of 9.5%, with 60 basis points of margin expansion. On a same-store basis, Darren reported: Revenue growth of 7.9% year over year (Canada up 9.6%). Occupancy up 280 basis points year over year to 88.4% (U.S. up 280 basis points to 85.6%; Canada up 270 basis points to 93.4%). RevPAR up 4.6% year over year (Canada up 6.5%). Expense per occupied room (ExpPOR) up 1.8% year over year. Same-store cash NOI growth of 14.4% year over year. Matros added that same-store SHOP NOI growth was higher than the prior two quarters. He said overall SHOP occupancy dipped slightly, but attributed the decline to Canada. He described Canada as “almost effectively full” at 93.4% occupancy, while noting the U.S. portfolio was up 10 basis points sequentially. In response to a question about expense trends, Matros said the modest ExpPOR growth was driven by operating leverage and that he would expect it to “continue at levels that low for the foreseeable future.” Matros said Sabra’s rent coverage improved across multiple segments. “Our skilled nursing rent coverages continue to grow, as did our senior housing triple net and behavioral, all of which hit new highs in coverage,” he said, adding that the company’s “top 10 coverage is stronger than it’s ever been.” He also reported occupancy growth in the skilled nursing and senior housing triple-net portfolios. Matros also highlighted a milestone in portfolio composition: “For the first time in the company’s history, our private pay concentration is now over 50% of the portfolio.” CFO Michael Costa reported normalized FFO per share of $0.38 and normalized AFFO per share of $0.39 for the first quarter. He said those figures represent a 9% and 5% increase, respectively, over the same period in 2025. In dollars, normalized FFO totaled $96.1 million and normalized AFFO totaled $100.6 million. Costa said cash NOI from the triple-net portfolio increased $2.2 million from the prior quarter, driven primarily by annual rent escalators and increased collections from certain cash-basis tenants. Managed senior housing cash NOI totaled $39 million versus $35.6 million in the prior quarter, primarily due to investment activity and sequential same-store growth, he said. On expenses and other line items, Costa reported interest and other income of $10 million (down from $10.6 million), cash interest expense of $26 million (down from $26.6 million), and normalized cash G&A of $11 million (up from $10.6 million), with the G&A increase tied to hosting the company’s 2026 operator conference. The board declared a quarterly cash dividend of $0.30 per share, payable May 29, 2026 to stockholders of record as of May 15, 2026. Costa said the dividend represents a payout of 77% of first-quarter normalized AFFO per share and is “adequately covered.” Costa said net debt to adjusted EBITDA was 5.04x as of March 31, 2026, “in line with our targeted leverage.” He reported a 3.92% cost of permanent debt and an average remaining term of about four years, with the next material maturity in 2028. Costa added Sabra has no floating-rate exposure in permanent debt, with floating-rate borrowings limited to the revolver. On capital markets activity, Costa said Sabra has been using the forward feature of its ATM to help fund its pipeline. During the quarter, the company issued $128 million on a forward basis at an average price of $20.19 per share after commissions. In total, Costa said Sabra had $451 million outstanding under forward contracts at an average price of $19.03 per share after commissions. Liquidity totaled about $1.2 billion as of March 31, comprised of $117 million of unrestricted cash, $645 million of revolver availability, and the $451 million in outstanding forward sales agreements, Costa said. He added Sabra also had $353 million available under the ATM program. Subsequent to quarter end, Costa said Sabra completed the sale of three skilled nursing facilities in Maryland leased to CommuniCare for gross proceeds of $79.4 million, equating to a 6.8% lease yield. Matros emphasized the sale was not a broader signal of skilled nursing asset sales, calling it “a very unique situation” driven by CommuniCare’s desire to exit Maryland. Regarding outlook, Costa said the company reaffirmed 2026 earnings guidance and that first-quarter results were in line with the assumptions underlying that guidance. Matros said Sabra is “affirming guidance,” but would revisit it in the second quarter given operating and investment trends. In Q&A, management repeatedly pointed to SHOP NOI growth as a key swing factor for results versus the guidance range. A company representative noted that first-quarter results were around the midpoint (or slightly below) and that same-store SHOP NOI growth came in at 14%, consistent with the company’s expectation for “low to mid-teen” SHOP NOI growth. Management also discussed behavioral health tenant Landmark. Matros said Sabra had been working through Landmark’s exit process in the court system and helped bring in a buyer for a group of assets. Costa said Sabra collected “somewhere around, like, a million and a half” from Landmark in the first quarter and expected that run rate to continue until the assets transact. On a follow-up, Costa said the Landmark income was included in original guidance and that it was not expected to persist for the full year, suggesting it would likely end around the end of the second quarter, though timing could slip. On reimbursement, Matros said the Medicare market basket proposal “is within our expectations” and that management expects Medicaid rates to be within expectations as well. He added that, after pandemic-era inflation, rates appear to be “revert[ing] back to the historical norm before the pandemic,” noting Medicare and Medicaid rates “peaked in 2024.” Executives also highlighted ongoing technology investments. Matros said Sabra intends “to be an AI-enabled REIT,” while Costa said AI and automation efforts are focused on speeding back-office workflows and data processing and improving operator insights. Costa said the primary benefit should be slowing G&A growth as Sabra scales, rather than producing significant absolute G&A cuts. Sabra Healthcare REIT, Inc (NASDAQ: SBRA) is a real estate investment trust that acquires, owns and operates net‐lease healthcare properties. Its diversified portfolio spans senior housing communities, skilled nursing and rehabilitation centers, outpatient medical facilities, medical office buildings, hospitals and life science properties. Sabra structures long‐term, triple‐net lease agreements with healthcare operators, providing stable rental income streams while allowing tenants to focus on patient care and operational excellence. Serving a broad spectrum of care segments, Sabra's tenants include both regional and national providers of assisted living, independent living, memory care, post‐acute rehabilitation and research and development laboratories. The article "Sabra Healthcare REIT Q1 Earnings Call Highlights" was originally published by MarketBeat.